When Assessing General Purpose Financial Statements, the Financial Analyst Takes

question 14

Multiple Choice

When assessing general purpose financial statements, the financial analyst takes into consideration the fact that many important assets may not be included in the company's statement of financial position, such as human resource capital, intellectual property and social responsibility.This limitation is the result of applying which of the following characteristics of financial information?

• A)Entity concept
• B)Unit-of-measure assumption
• C)Going-concern assumption
• D)Periodic-reporting assumption

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Definitions:

Maturity Value

The total amount that will be paid to an investor at the maturity date of a financial instrument, including principal and interest.

Bank Discount

The difference between the face value of a banknote or security and its selling price, before it reaches its maturity.

Discount Period

The time frame within which a buyer can pay less than the full amount due by taking advantage of a discount offered by the seller.

Discounted Note

A promissory note that is sold or redeemed for less than its face value before its maturity date.