Tekst Overview of accounting analyses
13 important questions on Tekst Overview of accounting analyses
Expensing the cost of intangibles has two implications for analysts, which are they?
- Omission of intangible assets from the balance sheet inflates measured rates of return on capital (return on assets or return on equity).
- It makes it more difficult for the analyst to assess whether the firm's business model works.
What are the warning signs of inadequate allowances?
What are receivables that are discounted with a financial institution?
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With discount receivables is their any risk for the seller?
How should liabilities be assessed?
When are liabilities likely to be understated?
The most common forms of liability understatement arise when the following conditions exist:
- unearned revenues are understated through aggressive revenue recognition
- provisions are understated
- loans from discounted receivables are off-balance sheet
- non-current liabilities for leases are off-balance sheet
- post-employment obligations, such as pension obligations, are not fully recorded
Explain unearned revenues understated.
What is a provision?
Name two contingent claims.
What is a stock option?
What do proponents (voorstanders) of options argue?
What are convertible debentures?
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