Finance Quarter Training Q3'22

Question 1: Which of the following is NOT a SEC filing form ?

• A. Form 10-Q

• B. Form 110

• C. Form 10-K

• D. 8-K

Answer explanation

Answer: Form 110 .

We only have form 10-K , 10-Q and 8-K for SEC filing.

Question 2: How often must a 10-K be filed ?

• A. Annually

• B. Quarterly

• C. Once a month

• D. Bi-annually

Answer explanation

Answer: Form 10-K to be filed annually by the Company about its financial performance.

Question 3: Which of the following is NOT found in a 10-Q?

• A. Financial Statements

• B. Risk Factors

• C. Report of Independent Registered Public Accounting Firm (Auditors' Report)

• Management's discussion and analysis of financial and result of operations (MD&A)

Answer explanation

Answer: Report of Independent Registered Public Accounting Firm (Auditors' report)

This is only available in 10-K filing.

Question 4: Which of the following need to be eliminated from Consolidated Financial statement, except.....

• A. Intercompany Sales & Purchases

• B. Intercompany Dividends

• C. Realized Intercompany Profit

• D. Intercompany Receivables & Payables

Answer explanation

Answer: Realized Intercompany Profit

It is because its had sold to 3rd party.

Elimination is only required when there is an Unrealised Intercompany Profit (UIP).

Question 5: Which of the following will cause intercompany transactions (P&L) differences at Group ?

I. Both entities posted different SGD amount

II. Both entities posted same document currency (USD) but they are different functional currency entities (Company A: MYR vs Company B: USD)

III. Both entities posted same document currency (USD) and also having same functional currency (EUR)

• A. I only

• B. I and II

• C. I and III

• D. II and III

Answer explanation

Answer: I and II

I. Different amount posted

II. Conversion from DC to FC for Company A is based on daily rate and Translation from FC to GC is using average rate . Hence it will give rise to a different amount compared to Company B without conversion and translation.

Question 6: Which of the following is NOT a characteristic of an ASR ?

• A. An ASR allows a public company to expeditiously buy back large blocks of its outstanding shares from the market

• B. No limit to the max number of shares to be repurchased

• C. There is a limit on the maximum number of shares that can be repurchased per day

• D. Repurchase of shares occurs on a single day

Answer explanation

Answer: There is a limit on the maximum number of shares that can be repurchased per day.

This is only applicable in Open Market Repurchase ("OMR")

Question 7: Which of the following is NOT a positive impact of an ASR ?

• A. Ability to reduce share count instantly

• B. Creates a market event that increases volatility in the near-term

• C. Increases EPS over the long-term

• D. Prevent the involvement of activist investors

Answer explanation

Answer: Creates a market event that increases volatility in the near-term

Reason being this is a negative impact of an ASR.

Question 8: Which of the following costs are Not Allowed to be capitalized (I.e., must be expensed in the period incurred)?

• A. Costs that are explicitly chargeable to the customer under the contract

• B. Bid, proposal, and selling and marketing costs incurred in connection with the pursuit of the contract

• C. Direct labor (e.g., salaries and wages of employees who provide the promised services directly to the customer)

• D. Direct materials (e.g., supplies used in providing the promised services to a customer)

Answer explanation

Answer: Bid, proposal, and selling and marketing costs incurred in connection with the pursuit of the contract.

Reason being these are not incremental cost of a contract which costs will be incurred even without the contract, hence it should be expensed off.