【正文】 elfconstructed assets? A. B. C. D. 27. Assuming assets are depreciated, the recognition of assets price increase (asset revaluation) would result in: A. higher asset turnover B. higher future depreciation expense C. higher cash flow from operations D. higher future ROA 28. With the exception of legal costs, generally accepted accounting principles require that cost incurred in: Developing Patent Purchased Patents A. expensed expensed B. capitalized capitalized C. capitalized expensed D. expensed Capitalized 29. The RR Corporation had cash flow from operations of $40million. RR purchased $10 million in equipment and sold $6 million of equipment during the period. Cash flows from financing were $4million. What is RR39。s life. C. higher asset levels and lower equity levels in the early years of the asset39。 1Students Random Number : _________________________________ MSc IN APPLIED FINANCE Financial Statements Analysis INSTRUCTIONS TO STUDENTS 1 The time allowed for this examination paper is hours. 2 This examination paper contains thirtyfour (34) multiplechoice questions and three analytic questions. You are REQUIRED to answer ALL questions. No marks will be deducted for wrong answers. 3 Please select the most suitable answer to each question by shading your answer with pencil only in the answer sheet provided. 4 This is a closedbook examination. You are allowed to use a financial calculator. 5 There are ten (10) printed pages including this instruction sheet. 6 You are required to return the full set of question paper at the end of the examination. Please write your name on the top right hand corner of this instruction sheet. 一、 Single Choices （ points for each question, 51 points in total） 1. As a general rule, revenue is normally recognized when A. It is measurable B. It is measurable and received, C. The measurement process is plete. D. The earnings process is plete and cash receipt is assured. 2 2. If a pany recognizes revenue earlier than justified under accrual accounting, which of the following best describes the impact on accounts receivable and equity, respectively? Accounts Receivable Equity A. Overstated Overstated B. Overstated Understated C. Understated Overstated D. Understated Understated 3. If a pany uses the pleted contract method rather than the percentageofpletion method for a threeyear contract, the ine and cash from operations the pany recognizes in the first year are: A. will be greater and higher respectively, if the pletedcontract method is used B. will be lower and the same respectively, if the pletedcontract method is used C. will be the same for both methods D. will be lower and lower respectively, if the pletedcontract method is used 4. For a material item to be classified as an extraordinary item on the ine statement, the item must be: A. estimated and probable B. unusual in nature and infrequent in occurrence C. probable and infrequent in nature D. current and unusual in frequency 5. In the statement of Cash Flows, which of the following best describes whether inte