Question 1

Segments may be created by:

Accepted Answer

A) different types of business activities. 
B) geographic areas covered. 
C) product lines offered. 
D) all of the above. 
A) different types of business activities. 
B) geographic areas covered. 
C) product lines offered. 
D) all of the above.

Question 2

Which of the following statements is INCORRECT?

Accepted Answer

A) The balance sheet caption "Discontinued Operations" includes both operating income or loss of the segment during the divestiture period and gains or losses on the transaction at the point of sale of the segment. 
B) Income from discontinued operations is a component of net income. 
C) All gains and losses from discontinued operations are shown "net of tax." 
D) Financial analysts typically do not include discontinued operations in predictions of future corporate income because the discontinued segments will not continue to generate income for the business. 
A) The balance sheet caption "Discontinued Operations" includes both operating income or loss of the segment during the divestiture period and gains or losses on the transaction at the point of sale of the segment. 
B) Income from discontinued operations is a component of net income. 
C) All gains and losses from discontinued operations are shown "net of tax." 
D) Financial analysts typically do not include discontinued operations in predictions of future corporate income because the discontinued segments will not continue to generate income for the business.

Question 3

Earnings per share (EPS)is calculated as:

Accepted Answer

A) net income divided by the number of shares of common stock issued at the end of the year. 
B) net income divided by the number of shares of common stock outstanding at the end of the year. 
C) net income divided by the weighted-average number of shares of common stock outstanding throughout the year. 
D) net income divided by the weighted-average number of shares of common stock issued throughout the year. 
A) net income divided by the number of shares of common stock issued at the end of the year. 
B) net income divided by the number of shares of common stock outstanding at the end of the year. 
C) net income divided by the weighted-average number of shares of common stock outstanding throughout the year. 
D) net income divided by the weighted-average number of shares of common stock issued throughout the year.

Question 4

Accumulated Other Comprehensive Income is reported in the:

Accepted Answer

A) income statement. 
B) statement of comprehensive income. 
C) statement of retained earnings. 
D) statement of stockholders' equity. 
A) income statement. 
B) statement of comprehensive income. 
C) statement of retained earnings. 
D) statement of stockholders' equity.

Question 5

Which of the following statements is TRUE?

Accepted Answer

A) Income tax payable is the amount of tax to be paid to the government based on the company's financial statements. 
B) When income tax payable exceeds income tax expense, the company debits a Deferred Tax Asset. 
C) Deferred Tax Liability is usually shown on the balance sheet as a current liability. 
D) The income tax return and the income statement are identical. 
A) Income tax payable is the amount of tax to be paid to the government based on the company's financial statements. 
B) When income tax payable exceeds income tax expense, the company debits a Deferred Tax Asset. 
C) Deferred Tax Liability is usually shown on the balance sheet as a current liability. 
D) The income tax return and the income statement are identical.

Question 6

Earnings per share shows how much income a company earned for each share of common stock.

Accepted Answer

A) True 
 B)False

Question 7

On June 15, Copps Stores sold twenty-five computers, on account, to a company located in Argentina for 2,600,000 pesos. On that date the peso is worth $0.079. On July 15, when the peso was worth $0.070, payment was received. The journal entry on July 15 by Copps Stores would include a:

Accepted Answer

A) credit to Cash $205,400. 
B) credit to Accounts Receivable $182,000. 
C) debit to Foreign-Currency Transaction Loss $23,400. 
D) credit to Sales $182,000. 
A) credit to Cash $205,400. 
B) credit to Accounts Receivable $182,000. 
C) debit to Foreign-Currency Transaction Loss $23,400. 
D) credit to Sales $182,000.

Question 8

For a retailer, there will be positive income from operations if:

Accepted Answer

A) revenues are greater than cost of goods sold. 
B) revenues are greater than operating expenses. 
C) gross profit is greater than operating expenses. 
D) cost of goods sold is greater than operating expenses. 
A) revenues are greater than cost of goods sold. 
B) revenues are greater than operating expenses. 
C) gross profit is greater than operating expenses. 
D) cost of goods sold is greater than operating expenses.

Question 9

Assume it is the first year of operations. When pretax accounting income exceeds taxable income, a:

Accepted Answer

A) Deferred Tax Asset is debited. 
B) Deferred Tax Liability is credited. 
C) Deferred Tax Asset is credited. 
D) Deferred Tax Liability is debited. 
A) Deferred Tax Asset is debited. 
B) Deferred Tax Liability is credited. 
C) Deferred Tax Asset is credited. 
D) Deferred Tax Liability is debited.

Question 10

When a U.S.-based company has a payable denominated in a foreign currency, the U.S. company wants the foreign currency to ________ and the U.S. dollar to ________.

Accepted Answer

A) strengthen; strengthen 
B) strengthen; weaken 
C) weaken; strengthen 
D) weaken; weaken 
A) strengthen; strengthen 
B) strengthen; weaken 
C) weaken; strengthen 
D) weaken; weaken

Question 11

A prior-period adjustment is made to the ending balance of retained earnings in the current period's statement of stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 12

Financial statement fraud involving expense recognition involves:

Accepted Answer

A) understating the amount of expenses. 
B) failure to record and disclose some expenses. 
C) delaying the proper recognition of expenses. 
D) all of the above. 
A) understating the amount of expenses. 
B) failure to record and disclose some expenses. 
C) delaying the proper recognition of expenses. 
D) all of the above.

Question 13

Items of comprehensive income, other than net income, do not enter into the determination of earnings per share.

Accepted Answer

A) True 
 B)False

Question 14

Earnings per share amounts are computed for:

Accepted Answer

A) income from discontinued operations. 
B) income from continuing operations. 
C) net income. 
D) all of the above. 
A) income from discontinued operations. 
B) income from continuing operations. 
C) net income. 
D) all of the above.

Question 15

The operating expense section of an income statement would NOT include ________ expense.

Accepted Answer

A) salaries 
B) utilities 
C) supplies 
D) interest 
A) salaries 
B) utilities 
C) supplies 
D) interest

Question 16

Prepare a multistep income statement for Sterner Corporation for the year ending December 31, 2017. The tax rate for Sterner Corporation is 30%. Omit earnings per share. The following information is available:

Accepted Answer

Sterner Corporation

Question 17

Financial analysts typically include discontinued operations in predictions of future corporate income.

Accepted Answer

A) True 
 B)False

Question 18

Comprehensive income can be presented alone in a separate statement of comprehensive income.

Accepted Answer

A) True 
 B)False

Question 19

The loss from discontinued operations includes:

Accepted Answer

A) operating loss of discontinued segment during divestiture period. 
B) loss on sale of discontinued segment. 
C) unusual and infrequent losses.from other segments of the company. 
D) A and B. 
A) operating loss of discontinued segment during divestiture period. 
B) loss on sale of discontinued segment. 
C) unusual and infrequent losses.from other segments of the company. 
D) A and B.

Question 20

Following U.S. Generally Accepted Accounting Principles, how is a change in accounting estimate handled?

Accepted Answer

A) The new estimate must be used in the current and future years only. 
B) The new estimate must be used in the prior year financial statements only. 
C) The new estimate must be used in the future years only. 
D) The new estimate must be used in the prior, current and future years. 
A) The new estimate must be used in the current and future years only. 
B) The new estimate must be used in the prior year financial statements only. 
C) The new estimate must be used in the future years only. 
D) The new estimate must be used in the prior, current and future years.

Segments may be created by:

Which of the following statements is INCORRECT?

Earnings per share (EPS)is calculated as:

Accumulated Other Comprehensive Income is reported in the:

Which of the following statements is TRUE?

Earnings per share shows how much income a company earned for each share of common stock.

On June 15, Copps Stores sold twenty-five computers, on account, to a company located in Argentina for 2,600,000 pesos. On that date the peso is worth $0.079. On July 15, when the peso was worth $0.070, payment was received. The journal entry on July 15 by Copps Stores would include a:

For a retailer, there will be positive income from operations if:

Assume it is the first year of operations. When pretax accounting income exceeds taxable income, a:

When a U.S.-based company has a payable denominated in a foreign currency, the U.S. company wants the foreign currency to and the U.S. dollar to .

A prior-period adjustment is made to the ending balance of retained earnings in the current period's statement of stockholders' equity.

Financial statement fraud involving expense recognition involves:

Items of comprehensive income, other than net income, do not enter into the determination of earnings per share.

Earnings per share amounts are computed for:

The operating expense section of an income statement would NOT include ________ expense.

Prepare a multistep income statement for Sterner Corporation for the year ending December 31, 2017. The tax rate for Sterner Corporation is 30%. Omit earnings per share. The following information is available:

Financial analysts typically include discontinued operations in predictions of future corporate income.

Comprehensive income can be presented alone in a separate statement of comprehensive income.

The loss from discontinued operations includes:

Following U.S. Generally Accepted Accounting Principles, how is a change in accounting estimate handled?

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets, Natural Resources, Intangibles

Long-Term Investments the Time Value of Money

Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 11: Evaluating Performance: Earnings Quality, the Income Statement, Statement of Comprehensive Income

Segments may be created by:

Which of the following statements is INCORRECT?

Earnings per share (EPS)is calculated as:

Accumulated Other Comprehensive Income is reported in the:

Which of the following statements is TRUE?

Earnings per share shows how much income a company earned for each share of common stock.

On June 15, Copps Stores sold twenty-five computers, on account, to a company located in Argentina for 2,600,000 pesos. On that date the peso is worth $0.079. On July 15, when the peso was worth $0.070, payment was received. The journal entry on July 15 by Copps Stores would include a:

For a retailer, there will be positive income from operations if:

Assume it is the first year of operations. When pretax accounting income exceeds taxable income, a:

When a U.S.-based company has a payable denominated in a foreign currency, the U.S. company wants the foreign currency to ________ and the U.S. dollar to ________.

A prior-period adjustment is made to the ending balance of retained earnings in the current period's statement of stockholders' equity.

Financial statement fraud involving expense recognition involves:

Items of comprehensive income, other than net income, do not enter into the determination of earnings per share.

Earnings per share amounts are computed for:

The operating expense section of an income statement would NOT include ________ expense.

Prepare a multistep income statement for Sterner Corporation for the year ending December 31, 2017. The tax rate for Sterner Corporation is 30%. Omit earnings per share. The following information is available:

Financial analysts typically include discontinued operations in predictions of future corporate income.

Comprehensive income can be presented alone in a separate statement of comprehensive income.

The loss from discontinued operations includes:

Following U.S. Generally Accepted Accounting Principles, how is a change in accounting estimate handled?

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets, Natural Resources, Intangibles

Long-Term Investments the Time Value of Money

Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Filters

When a U.S.-based company has a payable denominated in a foreign currency, the U.S. company wants the foreign currency to and the U.S. dollar to .