CFA一级百题进阶：财报分析.doc

4. Financial Statement Analysis Q-1. During the proccess of securitization of accounts receivables, a nonfinancial company receives proceeds less than the book value. The transaction is most likely to increase: A. net income. B. cash from financing activities. C. cash from operations. Solution: C. Proceeds received from selling A/R increase CFO. Since the proceeds are less than the book value of A/Rs, a loss should be reported on the income statement. 1-24 Q-2. Which of the following statements is most accurate regarding cash flow statements prepared under IFRS and U.S. GAAP? A. Under U.S. GAAP, bank overdrafts should be classified as a financing cash flow. B. Under IFRS, interest paid can be reported either as an operating or an investing cash flow. C. Both the direct and indirect formats of cash flow statements are allowed under IFRS and U.S. GAAP, but indirect is encouraged under IFRS only. Solution: A. Under U.S. GAAP, bank overdrafts are not considered part of cash and cash equivalents and are classified as financing cash flows. 2-24 Q-3. Which of the following transactions is least likely to increase reported operating cash flow for the period? A. Financing of payables. B. Securitization of receivables. C. Exercise of employee stock options. Solution: A. Financing payables actually reduces operating cash flow as payables are reclassified as short-term debt. Companies may decrease operating cash flows reported under the indirect method by using this strategy. Securitization of receivables increases operating cash flows as the funds received are treated as an operating cash inflow. Exercise of employee stock options increases operating cash flows due to tax benefits associated with exercise. 3-24 Q-4. Wally Ltd purchased a patent and the company has capitalised this expense. If tax is ignored, compared to expensing the cost, Wally will most likely to report: A. Lower EPS in that period. B. Lower CFI in that period. C. Lower CFO in that period. Solution: B. If t