All of the following are examples of questions that a financial analyst would ask about a company’s use of estimates in the recording of expenses except: 0


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All of the following are examples of questions that a financial analyst would ask about a company’s use of estimates in the recording of expenses except: 0 1 a. Do warranty provisions cover actual expenditures? b. Are sales taxes included in revenues? c. What expected lives and residual values are used for depreciation computations? d. Is the allowance for uncollectible accounts sufficient to cover bad debts? A financial analyst is comparing two companies using a top-down approach. Which of the following would cause problems in the evaluation process? 0 1 a. Inflation has been low for several years. b. One company has been in business significantly longer than the other company. c. One company’s fiscal year-end is October 31, while the other company’s fiscal year-end is December 31. d. The companies operate in different industries.

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