CFA Practice Question

There are 57 practice questions for this study session.

CFA Practice Question

Which of the following observations signal(s) poor quality of figures provided in the income statement and the balance sheet?

I. Recording sales of software after installation and acceptance by customer.
II. Lessor use of capital lease classification.
III. Capitalizing product development costs.
IV. Low expected return on assets for pension.
A. I and III
B. II and III
C. III and IV
Explanation: II recognizes revenue early. III may boost current income at the expense of future income.

User Contributed Comments 1

User Comment
bacorson So why isn't it A?
You need to log in first to add your comment.