Q1. Jerry Krome, CFA, is an equity analyst. The head of research at Krome’s firm composes a memo that contains the following statements: § To the extent that management has discretion over the firm’s revenue recognition, an analyst should consider policies that recognize revenue later to be more conservative than policies that recognize revenue sooner. § When comparing the performance of companies, an analyst can use the information in the financial statement disclosures to adjust the financial statements for differences in revenue recognition policies. With regard to the implications of revenue recognition policies for financial analysis, Krome should agree with: A) only one of these statements. B) both of these statements. C) neither of these statements.
Q2. Information about a company’s revenue recognition policies is most likely disclosed in: A) the financial statement notes. B) the standard auditor’s report. C) Management’s Discussion and Analysis.
Q3. When evaluating the differences between two revenue recognition policies, an analyst should view the policy as more conservative which: A) results in less leverage on the balance sheet. B) recognizes revenue later. C) is more dependent on management estimates.
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发表于 2009-1-17 09:06
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