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This quiz consists of 5 multiple choice and 5 short answer questions through Accounting Policy and Tax Matters.

Multiple Choice Questions

1. What did a bondholder have to do with their bond if they decided to cash it in early?
(a) Pay interest.
(b) Nothing.
(c) Earn more.
(d) Transfer it back to the owner.

2. The different classes of stock allow _______ investors to still have value for the money they can spend.
(a) Small.
(b) Large.
(c) Short-term.
(d) Long-term.

3. The current value of the company Buffett and his partner bought showed that they understated its current ________ value.
(a) Market.
(b) Intrinsic.
(c) Business.
(d) World.

4. What was coined as the term for the amount of undiscovered embezzlement?
(a) Bezz.
(b) Bezzle.
(c) Embezzling.
(d) Bonding.

5. ___________ recognized that statements are not adequate compared to segment data that enabled control of business.
(a) Shareholders.
(b) Management.
(c) The public.
(d) The business students.

Short Answer Questions

1. Accounting for the purchase of a business required allocating the ________ first to the fair value of net assets.

2. Buffett and Munger believed that investors should pay attention to business results, not __________.

3. Buffett admitted that issuing ________ in mergers cost shareholders money, according to the book.

4. Buffett and Munger described the acquisition process as being akin to finding a ________.

5. Below investment grade bonds are generally called ________, since they are able to be transformed.

(see the answer key)

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