All of the Following Are Considered by Analysts When Assessing

question 44

Multiple Choice

All of the following are considered by analysts when assessing the quality of accounting except:

• A) Price variation and the speed at which inventory turns over
• B) Any liquidation of FIFO inventory layers
• C) Any physical deterioration or obsolescence of inventory
• D) The inventory cost-flow assumption chosen by management

---

Definitions:

Compounded Semi-Annually

A frequency of interest calculation where the interest is added to the principal every six months, resulting in earning interest on interest in the second half of the year.

Present Value

The current value of a future sum of money or stream of cash flows, given a specified rate of return.

Perpetuity

A type of financial instrument that pays a fixed amount of cash flows indefinitely, without a maturity date.

Compounded Monthly

A method of calculating interest in which the interest earned each month is added to the principal, and future interest is calculated on the new total.