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LOS b: Describe the relationship between the level of accruals and the persistence of earnings, and the relative multiples which the cash and accrual components of earnings should rationally receive in valuation.
Q1. Complete the following sentence. An analyst would apply _________ to the cash component of income compared to the accrual
component when evaluating company performance.
A) a higher weighting.
B) a lower weighting.
C) the same weighting.
Q2. Holding everything else constant, the existence of which of the following items will most likely result in direct cash inflows or
outflows for a firm in the future?
A) Unearned revenue.
B) Deferred expenses.
C) Accrued expenses.
Q3. Complete the following sentence. The cash component of income is ___________ than the accrual component.
A) less persistent.
B) more persistent.
C) the same persistence.
[此贴子已经被作者于2009-3-3 9:25:22编辑过] | 
发表于 2009-3-3 09:19
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