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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

1. Businesses must recognize present value _______ for post-retirement health benefits, according to Buffett.
(a) Charts.
(b) Liability.
(c) Concerns.
(d) Reporting.

2. ________ earnings were the reporting of income of one company that owns another.
(a) Fixed.
(b) Variant.
(c) Look through.
(d) Truthful.

3. All acquisition considerations were paid for in ________, according to the book's information.
(a) Stocks.
(b) Handshakes.
(c) Cash.
(d) Trades.

4. _________ was spurious, to Buffett, compared to depreciation charges for deteriorating assets.
(a) Stock market value.
(b) Acquisition investment.
(c) Amortization.
(d) Annual reporting.

5. The common stock par value was reduced to _________, according to the book.
(a) One cent.
(b) One dollar.
(c) One quarter.
(d) One dime.

Short Answer Questions

1. Buffett was often frustrated with _________, even though it was valuable for business practices.

2. The satire talked about charging off ________ value to negative one million dollars so the company could convert depreciation cost to annual appreciation gain.

3. LBO operators benefitted from the use of ________ to reshuffle business, risk little of their own money to gain high fees, etc.

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

5. Buffett stated that his position with any stock repurchase does not imply acceptance of _______, which he calls extortion.

Short Essay Questions

1. What was done in order to minimize any loss from accounting adjustments during the US Steel transactions?

2. What threatened the global competitiveness of major American industries, according to the book?

3. How did Buffett avoid diluting share value to existing shareholders?

4. What was the expected benefit for the Berkshire NYSE listing, according to the book?

5. Despite his frustration with the GAAP, what did Buffett come to realize about accounting data?

6. What were the three main thing that shareholders always knew about Munger and Buffett?

7. What did Buffett prefer in trading that allowed for more benefits to long-term owners of stock?

8. What did Buffett want to do with the Berkshire stock on the NYSE?

9. What was the simple rule that Buffett followed when it came to exchange of stock during a merger?

10. What was the strategy that Buffett employed in order to acquire businesses, after learning the lesson from the golf pro?

(see the answer keys)

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