a) How are revenues and expenses recognized under the accrual basis of accounting? a.Revenues are recognized when cash is received and expenses are recognized when cash is paid. b.Revenues and expenses are recognized equally over a twelve month period. c.Revenues and expenses are recognized based on the choices of management. d.Revenues are recognized in the accounting period when the sale is made and expenses are recognized in the period in which they relate to the sale of the product.

b) Which of the following would increase earnings but lower the quality of reported earnings?

a.Taking a loss on obsolete inventory. b.Embarking on a capital expansion. c,Increasing discretionary expenses. d. Decreasing discretionary expenses.

Question c)

What item is probably the least useful when analyzing financial statements? a. Management discussion and analysis. b. Public relations materials. c.The income statement. d.The notes to the financial statements.

d) Which of the following circumstances might indicate that management is manipulating the allowance for doubtful accounts? a.A company lowers its credit standards and the allowance account increases. b.A company tightens its credit standards and the allowance account decreases. c.A company lowers its credit standards and the allowance account decreases. d.A company tightens its credit standards and the allowance account increases.

e) Which SAP concept is required for a full set of financial statements derived directly from that ERP system? a.Plant Code b.Profit Center c.Company Code d.Operating Concern

f)

Which SAP concept can be grouped?

a.Cost Center (s) b.Company Code(s) c.Operating Concern(s) d.Client(s)

g) Of what value is the calculation of gross profit margin? a.The gross profit margin helps the analyst assess the capital structure of the firm. b.The gross profit margin allows the analyst to determine if the firm has been affected by inflation. c. The gross profit margin indicates the profitability of a firm after considering all operating expenses. d.The gross profit margin is the first step of profit measurement indicating how much profit the firm generates after deducting cost of goods sold.

h) Reduction of what expense account might impair the ongoing success of a pharmaceutical firm? a. Research and development. b. Advertising. c. Cost of Goods Sold. d. Income tax expense.

i) If net cash used by operating, financing and investing activities are added together, the result is:

a.Net income. b.The change in cash. c.Cash inflow. d.Cash outflow.

Question j) All of the following are found within the FI Module except: a, Bank Accounting and Treasury Functions b,Cost Centers c,The General Ledger d,Fixed Assets

l) Which of the following items would be considered low quality of financial reporting? a. Maintaining research and development expenses even if the economy is in a downturn and the net earnings number will be lower as a result. b.Revealing the poor financial condition of a customer that may file for bankruptcy. c,Using an accelerated method of depreciation for vehicles. d,Reducing advertising expenses at a beverage company so that higher earnings are reported.

m) All of the following items should be evaluated when assessing the quality of financial reporting on the balance sheet except: a.The type of debt used to finance assets--in particular, if short-term debt is used to finance current assets and long-term debt is used to finance long-term assets. b.Whether operating cash outflows have been erroneously recorded as capital expenditures. c.Disclosures related to off-balance-sheet financing. d. Disclosures related to operating and capital leases.