Many Times a Financial Analyst May Decide to Make Adjustments

question 29

Multiple Choice

Many times a financial analyst may decide to make adjustments to the financial statements in order to make the statements more useful.Which of the following would not require an adjustment to the financial statement?

• A) A company signs a new contract with a customer.
• B) A delivery company incurs a loss from disposition of used delivery trucks.
• C) A company changes the useful life of its equipment from 5 years to 8 years.
• D) A company incurs a charge related restructuring its operations.

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Definitions:

Maturity Phase

A stage in the product life cycle where sales growth stabilizes, and the product is well established in the market, facing increased competition.

Market Segments

The process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as segments) based on some type of shared characteristics.

New-To-The-World

Products or services that create an entirely new market by being the first of their kind.

Consumer Preferences

The subjective tastes and desires that influence an individual’s choice of products or services.