No Brainer, free marks...

Guys, I hope this is ethical, but maybe we can keep a thread going with questions that always seem to come up in exams? To start things off; e.g." Under IFRS Lifo is not permitted inventory method, it is allowed under GAAP." Now I am not an accountant, but in tests I have done so far, this question always seems to appear and strikes me as an easy point. Any others to add to the list?

Good thread idea. When NPV and IRR conflict for mutually exclusive projects, follow the NPV decision because it is more likely to increase shareholder wealth.

what is ifrs?

International Financial Reporting Standards Learn the differences between IFRS and USGAAP, they came up in the summer exam (although, only one question I think).

mpnoonan Wrote: ------------------------------------------------------- > what is ifrs? International Financial Reporting Standards. Is that a question that is often asked??? Good one ICETonez, that is one I have seen a couple of times! Lets keep this going!

If cost of capital > IRR, NPV will be negative

Mosaic Theory states that analysts may act on both public and nonmaterial nonpublic information.

Switch from straight line to DDB depn will reduce income (by increasing Depn exp in short term). know the effect on this of ratios - like decrease ROE and increase turnover. no effect on cash flow

Puts increase value of a bond, calls decrease value.

Cash dividends paid are reported as a cash outflow in the cash flow from financing activities section on the statement of cash flows.

The internal rate of return method assumes that the cash flows from a project are reinvested at the project’s internal rate of return; the net present value method assumes that cash flows are reinvested at the cost of capital.

The operating cycle = number of days of inventory + number of days of receivables

The cash conversion cycle = number of days of inventory + number of days of receivables – number of days of payables

Credit spreads tend to widen during an economic contraction and tend to narrow during an economic expansion.

Here’s a quick way to memorize the code of standards. “American Apparel Uses Preteen Models” APP - ticker symbol for American Apparel APPUPM Act with integrity Place Integrity of investment industry Practice & encourage others Use reasonable care Promote integrity of and uphold rules governing Maintain and improve professional competence

The market segmentation theory asserts that the supply and demand for funds determine the interest rates for each maturity sector.

Margin in the stock market involves a loan used to buy securities, whereas margin in the futures market is a down payment or a performance bond.

ethics codes: Parties (professional) In (integrity) Denmark (duties to clients) Dont (duties to employers) Include (investment analysis) Coldplay (conflicts of interest) Responsibilities (as canditdate or member) i know its random but i saw it on flashcard exchange and thought it was useful.

how do u guys know these questions always come up in exams?..i thought the curriculum changes every year?

the institute makes minor changes to the material each year (probly so it can sell more books - although this may change now that books are included in the enrolment fee). it seems that only around 5% (if that?) of the cirriculum would change from year to year. you wont see a change to core stuff like, put call parity, LIFOvFIFO, CAPM, economics etc