Understanding Financial Statements 11th Edition Fraser Test Bank

Understanding Financial Statements

11th Edition Fraser Test Bank
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financial-statements-11th-edition-fraser-test-bank/

Test Questions and Solutions

Chapter 1

True-False

1. A firm’s annual report contains only two pieces of information: the financial
statements and the notes to the financial statements.

2. The SEC regulates U.S. companies that issue securities to the public and
requires the issuance of a prospectus for any new security offering.

3. The FASB has congressional authority to set accounting policies.

4. The European Union began requiring publicly traded companies to use U.S.
GAAP in 2005.

5. External auditors are required to audit the internal control assessment of the
company as well as the financial statements.

6. Congress passed the Sarbanes-Oxley Act of 2002 in hopes of ending future

accounting scandals and renewing investor confidence in the marketplace.

7. The Management Discussion and Analysis is of potential interest to the analyst

because it contains information that cannot be found in the financial data.

8. Information that is significant enough to make a difference in a decision is

considered to be immaterial.

9. The time period assumption assumes a two year time frame with interim
reporting occurring daily and weekly.

10. GAAP-based financial statements are prepared according to the accrual basis
of accounting.

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Fill in the Blank

1. The requires all public companies to file a Form 10-K report

annually.
2. A corporate annual report contains financial statements.

3. is responsible for the preparation of the financial statements,

including the notes, and the attests to the fairness of the
presentation.

4. The was passed in 2002 and was one of the most sweeping
corporate reforms since the Securities Act of 1934.

5. The is a document used to solicit shareholder votes.

6. The Assumption is the assumed unit of measurement when

preparing financial statements.

7. The cash basis of accounting recognizes when cash is received and

recognizes when cash is paid.

8. The sharper and clearer the picture presented through the financial data and the
closer that picture is to financial reality, the higher the financial
statements and reported earnings.
9. One of the generally accepted accounting principles that provide the foundation
for preparing financial statements is the principle.

10. Management exercises control over the budget level and timing of
expenditures.

Multiple Choice

1. What information would not be found in a firm’s annual report?

a. Notes to the financial statements.
b. Financial Reporting Rulings.
c. Auditor’s report.
d. High and low stock prices.

2. Which agency requires the filing of Form 10-Ks, Form 10-Qs and Form 8-Ks?
a. FASB.
b. IASB.
c. SEC.
d. GAAP.
 Another random document
un-related content on Scribd:
To the unknown region beyond.

“So for ages hath man

Gazed on the ocean of time
From the shores of his birth, and, turning
His eyes from the quays, the thronged
Marts, the noise and the din
To the far horizon, hath dreamed
Of a timeless country beyond.
Vainly: for how should he pass,
Being on foot, o’er the wet
Ways of the unplumbed waves?
How, without ship, should he pass
Over the shipless sea
To the timeless country beyond?

“Ah, but once—once long ago,

There came a ship white-sailed
From the country beyond, with bright
Oarsmen, and men that sang;
Came to Humanity’s coasts,
Called to the men on the shore,
Joyously touched at the port.
Then did time-weary man
Climb the bulwarks, the deck
Eagerly crowding. Anon
With jubilant voices raised,
And singing, “When Israel came
Out of Egypt,” and whatso else
In the psalm is written, they passed
Out of the ken of the land,
Over the far sea-line,
To the unknown region beyond.

“Where are they now, then—they

That were borne out of sight by the ship—
Our brothers, of times gone by?
Why have they left us here,
Solemn, dejected, alone,
Gathered in groups on the shore?
Why? For we, too, have gazed
O’er the waste of waters, and watched
For a sail as keenly as they.
Ah, wretched men that we are!
On our haggard faces and brows
Aching, a wild breeze fawns
Full of the scents of the sea,
Redolent of regions beyond.
Why, then, tarries the ship?
When will her white sail rise
Like a star on the sea-line? When?

“When?—And the answer comes

From the sailless face of the sea,
“Ah, vain watchers, what boots
The calm of the evening?
Have ye not watched through the day
Turbulent waves, the expanse
Endless, shaken with storm,
And ask ye where is the ship?
Deeper than plummet can dive
She is bedded deep in the ooze,
And over her tall mast floats
The purple plain of the calm.”

“Yes—and never a ship

Since this is sunken, will come
Ever again o’er the waves—
Nay, not even the craft with the fierce
Steersman, him of the marsh
Livid, with wheels of flame
Circling his eyes, to smite
The lingering soul with his oar.
—Not that even. But we
Drop where we stand one by one
On the shingles and sands of time,
And cover in taciturn gloom,
With only perhaps some tear,
Each for his brother the hushed
Heart and the limitless dreams
With a little gift of sand.”
 C T .
By a Modern Thinker.
’Tis Christmas-eve; a low wind breathes:
The windows of the church are bright,
And girls with happy eyes to-night
Are hanging up the Christmas wreaths;
And village voices by and by
Will reach my windows through the trees
With wild sweet music: “Praise on high
To God, on earth good will and peace!”

O happy girls that hang the wreaths

O village fiddlers, happy ye!
Christmas to you still truly breathes
Good-will and peace, but not to me!

Yes, gladness is your simple rôle

Ye foolish girls, ye labouring poor;
But ill would joy beseem my soul,
To sigh, my past is, and endure.
For as once Rousseau stood, I stand
Apart, made picturesque by grief
One of a small world-weary band,
The orphans of a dead belief
Through graveyards lone we love to stray,
And sadly the sad tombs explore,
And contradict the texts which say
That we shall rise again once more.
Our faith is dead, of course, and grief
Fills up its room; and Christmas pie
And turkey cannot bring relief
To such as Obermann and I.

Ah, Obermann! and might I pass

This English Christmastide with thee
Far by those inland waves whose glass
Brightens and breaks by Meillerie!
Or else amidst the loveliest dells
Alp-crags with pine we’d mix our sighs;
Mourn at the sound of Christmas bells
Sniff at the smells of Christmas pies;
But thou art dead, and long dank grass
And wet mould cools thy tired hot brain;
Thou art lain down and now, alas,
Of course you won’t get up again

Yet Obermann, ’tis better so;

For if, sad slumberer, after all
We were to re-arise you know
’Twould make us feel so very small.
Best bear our grief this manlier way,
And make our grief be balm to grief
For if in faith sweet comfort lay
There lurks sweet pride in unbelief.

Wherefore remembering this once more,

Unto my childhood’s church I’ll go
And bow my head to that low door
I passed through standing long ago.
I’ll sit in the accustomed place
And make, whilst all the unlearned stare
A mournful atheistic face
At their vain noise of unheard prayer.
Then whilst they hymn the heavenly birth
And angel-voices from the skies,
My thoughts shall go where Weimar’s earth
For ever darkens Goethe’s eyes;
Till sweet girls’ glances from their books
Shall steal towards me as they sigh,
“How intellectual he looks
And yet how wistful! and his eye
Has that vain look of baffled prayer.”
And then when church is o’er, I’ll run
Comb misery into my hair,
 And go and get my portrait done!
W. H. M.

This parody of Matthew Arnold appeared in The World some years ago,
so that the Saturday Reviewer before alluded to must either have been Rip
Van Winkle, or very fresh from school.
——:o:——
G L .
For the son of a Duke, and the husband of a Princess, to write and to
publish a poem was a pretty piece of condescension, which was not
properly appreciated. But, alas! we live in a busy age, and two thousand
lines of verse have a deterring effect on the average modern mind. To
overcome the difficulty, Funny Folks condensed the Marquis of Lorne’s
dismal poem Guido and Lita into half a dozen stanzas, faithfully preserving
the pith of the original.
Guido on the Riviera
Talketh verse unto his dad,
Brusquely says the father, “Bother!
Where is shelter to be had?”
For a storm is fiercely rising,
And the old man hath the blues—
Here a fisherman’s small cottage
Sentimental Guido views.

Guido there beheld his Lita

Frying fish—she turned to grin;
Guido, fired with sudden passion,
“Chucked” her underneath the chin,
Saying, “Sweetest maid, I love thee!”
Said the maiden unto him,
“Get out with your stuff and nonsense!
See, your parent’s looking grim.”

Soon the Paynim host came fiercely,

 Slaughtering with fire and sword;
Aid was sought from Guido’s father,
But that crusty knight was bored.
Off they carried beauteous Lita—
Guido could not bring relief;
Sirad, Saracenic leader,
Made her of his Harem chief.

There a victim of that Paynim

A goblet of “cold pizen” brings.
“When the Saracenic chieftain
At the banquet drinks and sings,”
Says this personage vindictive,
“Give this gruel, dear, to he—
It will cure him of his tantrums,
Straightway then arise and flee.”

Escaping thus, the dauntless Lita,

Emulating Joan of Arc,
Dons bright armour, sword, and buckler,
And in battle makes her mark.
This the “Elder Knight” perceiving
(Guido’s father), though a churl,
Said, “I never more will hinder
Guido’s penchant for the girl.”

Meanwhile, screwing up his courage,

Guido, maundering no more,
Has again put on his armour,
Plunged into the battle’s roar,
Deeds of daring without number,
Paynims driven from the walls,
Dying father, “Bless ye children!”
Tableau!—and the curtain falls.
Funny Folks, November 27, 1875.

——:o:——
NUTSHELL NOVELS.
V . I.
A winning wile,
A sunny smile,
A feather;
A tiny walk,
A pleasant talk,
Together!
V . II.
A little doubt,
A playful pout.
Capricious;
A merry miss,
A stolen kiss,
Delicious!
V . III.
You ask mamma,
Consult papa,
With pleasure!
And both repent
This rash event
At leisure!

M M .
A hat, a cane,
A nobby beau!
A narrow lane,
A whisper low.

A smile, a bow,
A little flirt!
An ardent vow—
That’s cheap as dirt!
A hand to squeeze,
A girl to kiss
Quite at one’s ease
Must needs be bliss.

A ring, a date,
A honeymoon,
To find too late
It was too soon!
 O S R .
A sleigh—
A day
Of glorious weather;
A girl—
A whirl
Of man and maid together.

A freeze—
A squeeze—
A touching of cold noses;
A crash—
A blush—
And cheeks as red as roses.

A yearn—
A turn,
And homeward they go flying;
A sigh—
Good-bye,
And then some more good by’ing.
* * * * *
A span—
A man
The livery stable trusted;
A youth,
In truth,
Demented, quite, and busted.
 N D I .
Carpets rise,
Dust flies,
Confusion reigns supreme;
Mouth dries,
Aching eyes,
Almost makes me scream.
Floors wet,
House upset,
I think you catch my meaning.
If not yet,
Soon I bet
You’ll see it is house-cleaning.
G. L. H .
 The four following examples originally appeared in Truth, February, 3,
1887, together with many others of a less amusing character:—
“Hansom quick!
Waterloo.
First-class tick-
ets for two.”

Wretched train;
Bray as last!
Will it rain?
Sky o’ercast.

Sudden shock!
Boat upset!
Brand new frock
Soaking wet.

Back to town
Feeling small,
Parents frown,
That is all!
C .

T O M .
Seventeen
Fairy Queen!
Rich and rare,
Golden hair!

Wilful maid
Youths upbraid:
Twenty-one,
Will have none!

Twenty eight
 Twenty-eight,
Getting late:
Rather vexed,
Unannexed!

Years advance,
Lost her chance;
Thirty-six,
Cross as sticks!
S .

Celandine,
Violet;
Shower and shine,
Baby Pet.

Sunny days,
Roses rare;
Woodland ways,
Maiden fair.

Changing leaves,
Busy feet;
Golden sheaves,
Mother sweet.

Snowflakes white,
Angel cheer;
Hope grows bright,
Granny dear!
D .

D .
Some like tea
Or cocoa;
 Not for me—
Thank you, no!

B. and S.
After sup.?
Thank you, yes!
Finish up.

Sparkling “boy,”
If the best,
Bringeth joy,
Wit and jest.

But of the
Drinks that cheer
Give to me
Bitter beer!
H.M.D.

A C O U N T RY Q U A RT E R S E S S I O N .
Three or four parsons, three or four squires,
Three or four lawyers, three or four liars;
Three or four parishes bringing appeals,
Three or four hands, and three or four seals;
Three or four bastards, three or four w——s,
Tag rag and bobtail three or four scores;
Three or four bulls, and three or four cows,
Three or four orders, three or four bows.
Three or four statutes not understood,
Three or four paupers paying for food;
Three or four roads that never were mended,
Three or four scolds, and the session is ended.
A .
 R L C ’ S .
Two or three facts without any foundation;
Two or three charges of party vexation;
Two or three metaphors warring on sense;
Two or three sentences ditto on tense;
Two or three knocks the table to hammer;
Two or three rants in defiance of grammar;
Two or three vows on economy’s plan;
Two or three hours ending but where you began;
Two or three novels in eulogium of tax;
Two or three hints about turning your backs;
Two or three boasts of venal majorities;
Two or three groans on dismal minorities;
Two or three cheers from two or three creatures;
Two or three fundaments, two or three features;
Two or three meanings which nobody reaches,
Will be certain to make one of Castlereagh’s speeches.
From The New Tory Guide. London, 1819.
 AR C .
Two or three dears, and two or three sweets;
Two or three balls, and two or three treats;
Two or three serenades, given as a lure;
Two or three oaths, how much they endure!
Two or three messages sent in one day;
Two or three times led out to the play;
Two or three soft speeches made by the way;
Two or three tickets for two or three times;
Two or three love-letters writ all in rhymes;
Two or three months keeping strict to these rules
Can never fail making a couple of fools.

AS E B .
The Grand Promotion Army.
I am Colonel North of the Horse Marines,
I began promoting when in my teens,
And I rather think I’m behind the scenes
In the Grand Promotion Army.

’Tis said to the early bird is due

The worm, and I’ve collared of worms a few;
For I came from Leeds, and “I’m Yorkshire too,”
In the Grand Promotion Army.

With Chili for long I cast my lot,

And made some money in that far spot;
And Chilies are strong and I make it hot
For the Grand Promotion Army.

The City imagination fails

To realise how the Nitrate Rails
Were boomed so high; but we tell no tales
 In the Grand Promotion Army.

Two hundred and eighty from fourteen!

Why, what could a rise so tremendous mean?
’Twas simply that I was upon the scene
With the Grand Promotion Army.

What great financial soul confines

Itself to a pitiful few designs?
There’s a smaller crop of Nitrate lines
For the Grand Promotion Army.

So we run them up, and the rig succeeds,

And if some day there’s somebody bleeds,
You bet it isn’t the tyke from Leeds,
Of the Grand Promotion Army.

Of Tarapaca I might be dumb;

For the waterworks have only come
To a trumpery thirty premium
For the Grand Promotion Army.

In promoting schemes I still persist:

There are lines that pay, yet don’t exist.
Egad! I’m quite the philanthropist
Of the Grand Promotion Army.

As all my friends and admirers know,

I’ve mixed myself up with Whitley’s show,
That the organ-grinder’s tin might flow
To the Grand Promotion Army.

Although I am bald, with whiskers red,

There’s Ouless, R.A., who paints one, said
He thought I had a wonderful head
For the Grand Promotion Army.

Then vive le jeu! and the game for me

 Is starting a merry companèe
And waltzing away with the £ s. d.
For the Grand Promotion Army.

For “some has brains and some has tin,”

As Orton remarked; and if you’d win,
Why, stick to the Colonel, and all stand in
With the Grand Promotion Army.
O .
The Financial News, May 26, 1888.

For reasons which can be easily understood by those interested in public

companies it has suited the Editor of The Financial News to cry down the
ventures in which Mr. John Thomas North is interested. It is easy enough to
sneer at him as the “Nitrate King,” and to laugh at his Volunteer Colonelcy,
but we do not hear that the Editor of The Financial News is either so
successful in business, or so hospitable in private life, as “Colonel North of
the Horse Marines.”

L D D ,
Seen floating in the Canal.
(N by A. C. Swinburne.)
In the stir and the tumult of nations,
’Mid the wrestlings of right and of power,
It is good to lay hold upon Patience
And sit by her side for an hour;
Apart from the world and her wonders,
In a garden of poppies to wait,
And list to the tremulous thunders
Of the chariot of Fate.
O carcase not fragrant but fetid!
O wave whither all things are shot!
O dogs not in honour, but treated
As of brutes the most rotten that rot!
O moment not gladsome but gloomy,
When the threads of our Fates intertwined;
O sepulchre, spacious and roomy
For thee and thy kind!

Thou wert fair ere the doleful disaster,

Firm thy muscles, thy bones featly set,
And they moved at the voice of thy master
Though obedience were tinged with regret.
What moved him, old dog, to thy slaughter,
To cast to the pike and the eel?
When o’er thy bright form closed the water
No remorse did he feel?

Dost thou dream in the night of existence

’Mong the things that have been and but seem,
Of thy passionate pulseful resistance
To the cad that consigned to the stream?
Dost thou dream, when of terriers the gamest
Thou didst leap from the leash to be freed,
And the blood of the rats thou o’ercamest
Besprinkled the mead?

By the maidens who love us and flatter,

By the maidens who flout us and jeer,
By the friends who but bore with their chatter,
By the others whose chatting can cheer,
By the tutors who woefully work us,
By the tutors who don’t in the least,
We adjure thee, respond out of Orcus,
Unfortunate beast.

The desire of an aimless flirtation

Is more than the wisdom of years,
Though we’ve tasted its utter nugation,
Light laughter and fugitive fears.
For the lords of terrestrial treasures
Afflict us and rack us with pains,
And we fly to the palace of pleasures
Forgetting their chains.

And we smile pressing hands in the dances,

And we feign what we give not nor take,
And indulge in the gleaming of glances
Though the heart is as cold as a snake.
As lovers, though loving not truly,
We are filled with the fire of the eyes
And with langours and laughs that unduly
Depress and surprise.

We are tender and warm in the twilight,

But the day finds us tuneless and old;
Till equally low light and high light
Have faded from field and from fold.
For the world hath in humbug abounded
Since the fiends bade the game to begin,
And the motto hath ever resounded,—
‘Let those laugh that win.’

Like Lady Macbeth or like Pontius,

We wash us, of these to be rid;
For sadly the soul is subconscious
That the fitness of things doth forbid.
But the water of Lethè were powerless
To cleanse from the rust of the years,
And the heavens are sultry and showerless
And the eye hath no tears.

Shall we e’er know what Atè intended,

Libitina and Clotho to boot,
When on Sunday three ’varsity men did
Encounter the corse, of the brute?