Data Analytics for Accounting

Business

Quiz 8 :

Perform the Analysis: Predictive Analytics

Quiz 8 :

Perform the Analysis: Predictive Analytics

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Predicting the possible existence of fraud is a classification predictive analysis.
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True False
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True

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According to the text, __________ does not prefer __________-basis accounting since it is inferior at forecasting future performance.
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A

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According to Altman's Z, the __________ amount of long-term profitability generally leads to __________ risk of bankruptcy.
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B

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We would expect a positive (+) relationship between loan acceptance and employment length.
True False
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The balance in the cash account is deterministic as compared to being probabilistic.
True False
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Predicting whether financial statements are fraudulent or not is an example of classification.
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All of the following are factors used by Altman's Z in predicting bankruptcy except:
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Which predictive analytics technique would be used to predict whether a firm is likely to have a material misstatement in the coming year?
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The higher the expected risk, the lower the expected return.
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Which predictive analytics technique would be used to predict the interest rate given from a lender (bank) to a borrower?
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Predicting whether it will rain tomorrow or next week is more deterministic than reporting the rain that happened yesterday.
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A good first step in a bankruptcy prediction is to know how many companies go bankrupt each year (as a percentage of total firms) to understand how prevalent bankruptcy is as a whole.
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If a company has an Altman Z-score of 1.7, the company would be classified in the __________.
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If a company has an Altman Z-score of 3.1, the company would be classified in the __________.
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The persistence of operating income as compared to cash flows from operations is consistent with GAAP requiring the use of __________ accounting for financial reporting purposes.
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Increase in receivables as compared to last period is a factor predicting financial statement fraud.
True False
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Which is more persistent in predicting future amounts of the variable based on current amounts of that same variable?
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Predicting which companies are likely to have misstated financial statements is an example of __________ in predictive analytics.
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We would expect a positive relationship (+) between loan acceptance and the debt-to-income ratio.
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We would expect that sales forecasts would be more accurate than forecasts of operating income.
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