|
14. Which of the following derivatives might potentially be
“marked-to-market” in the financial statements:
| a. |
Interest rate swaps
|
| b. |
Forward commodities contracts
|
| c. |
Foreign currency option contracts
|
| d. |
All of the above
|
15. Gross Margin is generally defined as:
| a. |
Revenues less allowances for returns and bad debts
|
| b. |
Revenues less direct operating costs, usually costs of goods sold
|
| c. |
Revenues less costs of goods sold plus depreciation and amortization
|
| d. |
None of the above |
16. Which of the following best describes the purpose of MD&A (management
discussion and analysis) in the financial statements?
| a. |
To report the results in a narrative, not tabular, manner
|
| b. |
Allow management to give an assessment of its own performance
|
| c. |
Describe trends and uncertainties in operations and capital resources
|
| d. |
Give and industry overview
|
17. A company issues a key supplier warrants to buy common stock of the
company.
| a. |
This is not an accounting event
|
| b. |
This is a an equity event that get accounted for when the warrant is
exercised
|
| c. |
The value of the warrant must be determined when issued and expensed over an
appropriate period
|
| d. |
The company should reduce its cost of goods sold over the life of the warrant
to reflect the value to the supplier
|
18. A new CEO is hired by the Board of Directors. The new CEO is given a
$250,000 relocation allowance that is repayable to the company if she leaves the
company within one year of her start date.
| a. |
The company should record a prepaid for the amount and expense it after
one year
|
| b. |
The company should amortize the expense over the first year of employment
|
| c. |
The company should expense it when paid
|
| d. |
None of the above |
| 
