Questions from Financial Reporting

Q: An arbitrary write-off of inventory can be justified under the

An arbitrary write-off of inventory can be justified under the conservatism concept. Is this statement true or false? Discuss.

Q: CPAs regard which two financial ratios as the most significant? The

CPAs regard which two financial ratios as the most significant? The highest rated profitability ratio? The highest debt ratio?

Q: Financial ratios are used extensively in annual reports to interpret and explain

Financial ratios are used extensively in annual reports to interpret and explain financial statements. Comment.

Q: List the sections of annual reports where ratios are most frequently located

List the sections of annual reports where ratios are most frequently located, in order of use.

Q: When reviewing the financial statements of oil and gas companies, why

When reviewing the financial statements of oil and gas companies, why is it important to note the method of costing (expensing) exploration and production costs?

Q: For oil and gas companies, there is the potential for a

For oil and gas companies, there is the potential for a significant difference between the reported income and cash flows from operations. Comment.

Q: Real estate companies contend that conventional accounting does not recognize the underlying

Real estate companies contend that conventional accounting does not recognize the underlying value of the property and that this misleads investors. Discuss.

Q: Give an example of why a review of bank assets may indicate

Give an example of why a review of bank assets may indicate risk or opportunity of which you were not aware?

Q: For regulated utilities, why review the account Construction Work in Progress

For regulated utilities, why review the account Construction Work in Progress?

Q: What is usually the biggest expense item for a bank?

What is usually the biggest expense item for a bank?