Module 10
Pretest
Choose the best answer.

1. What complicates financial information is ________________, overly complex statistics and formulas.
1. investment                                                       3. jargon
2. characteristics                                                 4. corporations
2. _________________ will vary somewhat from industry to industry, so a dictionary will help.
1. Finance                                                            3. Consequences
2. Circumstances                                                4. Terminology
3. _________________ are what a company uses to operate its business.
1. Competitors                                                    3. Assets
2. Liabilities                                                        4. Auditors
4. The main way one analyzes a balance sheet is by calculating a number of financial ____________.
1. problems                                                          3. liabilities
2. ratios                                                                 4. expenses
5. To have a positive cash flow, the company's periodic cash inflows must ______________________.
1. regularly exceed its periodic cash outflows           3. force a company into insolvency
2. get the money in the middle of June                       4. be made either physically or electronically
6. The financial statement that acts as a kind of ‘corporate checkbook’ is the ____________________.
1. balance sheet                                                  3. income statement
2. cash transaction                                             4. cash flow statement
7. Footnotes are the ________________________________________.
1. company’s operational performance       3. practices and reporting policies
2. fine print for financial statements            4. company's true financial performance
8. Usually, in footnote disclosures the second sentence explains what the rule does and the last ________.
1. presents expectations of the impact         3. gets bogged down in jargon and details
2. discloses all new accounting rules            4. may be reported in many places
9. ‘IPO’ stands for ___________________________________________.
1. Internal Policy Office                                  3. Initial Public Offering
2. International Payment Organization        4. Inter-Personal Opportunites
10. When reading a prospectus investors should determine whether ________________________.
1. advertising and promotion is sincere       3. the actual outcomes are uncertain
2. the projections are realistic                        4. it is likely to be found in other prospectuses