Red Flags in Financial Statement Analysis Can Include All of the Following

question 11

Multiple Choice

Red flags in financial statement analysis can include all of the following EXCEPT:

• A)an increase in income from continuing operations.
• B)decreased cash flows.
• C)a debt ratio higher than average.
• D)an increase in days' sales in receivables.

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Definitions:

Spontaneous Recovery

The reappearance of a conditioned response after a period of rest and with no further conditioning, often observed in behavioral psychology.

Extinction

The diminishing of a conditioned response; occurs in classical conditioning when an unconditioned stimulus (US) does not follow a conditioned stimulus (CS); occurs in operant conditioning when a response is no longer reinforced.

Conditioned Stimulus

A stimulus that, through association with an unconditioned stimulus, comes to elicit a response similar to the response to the unconditioned stimulus.

Conditioned Response

A learned reaction to a specific stimulus as a result of conditioning.