1) Current assets are assets that (1) are in the form of cash, (2) will be realized in cash,
or (3) conserve the use of cash within the operating cycle of a business or for one year,
whichever is shorter.
2) Earnings per share is the earnings per share of outstanding common stock.
3) A summary annual report is a condensed annual report that omits much of the
financial information included in a typical annual report.
4) A disclaimer of opinion is necessary when the exceptions to fair presentation are so
material that a qualified opinion is not justified.
5) Inventory turnover is a valuable tool for analyzing a railroad.
6) Using financial leverage results in a fixed change that can materially affect the
earnings available to the common shareholders.
7) The IASB published an IFRS for SMEs in 2009.
8) Reporting under Sarbanes-Oxley revealed that very few companies had material
weaknesses in their controls and processes.
9) The auditor will issue a qualified opinion when he/she has not performed an audit
sufficient in scope to form an opinion.
10) Changes in the cost of goods sold can have a substantial impact on gross profit
margin.
11) For the government-wide statements, governmental activities are to be presented
separately from the financial statements of business-type activities.
12) Accounting standards codification TM addresses U.S. GAAP for nongovernmental
entities.
13) Large oil and gas companies tend to select a variation of the full-cost method to
account for exploration and production costs.
14) The use of debt financing creates financial leverage.
15) Capitalized interest should not be considered as part of interest in the times interest
earned computation.
16) A loss in value of money is called inflation.