Abc阿范德萨的

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Information Field: Difficulty

Information Field: LO

Highest Answer Letter: E

Multiple Keywords in Same Paragraph: No

Chapter: Chapter 20: Analyzing Financial Statements

True/False

1. Financial statement analysis is the application of analytical tools to general-purpose financial statements and related data for making business decisions.

Ans: True

Difficulty: Easy

LO: 1

2. Financial statement analysis lessens the need for expert judgment.

Ans: False

Difficulty: Easy

LO: 1

3. External users of accounting information are often directly involved in running a company.

Ans: False

Difficulty: Moderate

LO: 1

4. The purpose of financial statement analysis for internal users is to provide information helpful in improving the company's efficiency or effectiveness in providing products or services.

Ans: True

Difficulty: Moderate

LO: 1

5. A company's board of directors analyzes financial statements to assess future company prospects for investing and lending decisions.

Ans: False

Difficulty: Hard

LO: 1

6. Profitability is the ability to generate future revenues and meet long-term obligations.

Ans: False

Difficulty: Easy

LO: 1

7. Liquidity and efficiency are considered to be building blocks of financial statement analysis.

Ans: True

Difficulty: Easy

LO: 1

8. Evaluation of company performance includes (1) past and current performance, (2) current financial position, and (3) future performance and risk.

Ans: True

Difficulty: Moderate

LO: 1

9. The four building blocks of financial statement analysis include (1) liquidity, (2) creditworthiness, (3) solvency, and (4) profitability.

Ans: False

Difficulty: Moderate

LO: 1

10. General-purpose financial statements include the (1) income statement, (2) balance sheet, (3) statement of changes in...