Question 1

If a company prepares a consolidated income statement, IFRS requires that net income be reported for

Accepted Answer

A)  the majority interest only. 
B)  the minority interest only. 
C)  both the majority interest and the minority interest. 
D)  as a single amount only. 
A)  the majority interest only. 
B)  the minority interest only. 
C)  both the majority interest and the minority interest. 
D)  as a single amount only. C

Question 2

Companies use intraperiod tax allocation for all of the following items except

Accepted Answer

A)  discontinued operations. 
B)  prior period adjustments. 
C)  changes in accounting estimates. 
D)  income from continuing operations. 
A)  discontinued operations. 
B)  prior period adjustments. 
C)  changes in accounting estimates. 
D)  income from continuing operations. C

Question 3

Companies report the results of operations of a component of a business that will be disposed of separately from continuing operations.

Accepted Answer

A) True 
 B)False  True

Question 4

Which of the following equations expresses the definition of "income"?

Accepted Answer

A)  Income = Revenues - Expenses 
B)  Income = (Revenues + Gains) - (Expenses + Losses) 
C)  Income = Revenues + Gains 
D)  Income = Gains - Losses 
A)  Income = Revenues - Expenses 
B)  Income = (Revenues + Gains) - (Expenses + Losses) 
C)  Income = Revenues + Gains 
D)  Income = Gains - Losses

Question 5

What might a manager do during the last quarter of a fiscal year if she wanted to decrease current annual net income?

Accepted Answer

A)  Delay shipments to customers until after the end of the fiscal year. 
B)  Relax credit policies for customers. 
C)  Pay suppliers all amounts owed. 
D)  Delay purchases from suppliers until after the end of the fiscal year. 
A)  Delay shipments to customers until after the end of the fiscal year. 
B)  Relax credit policies for customers. 
C)  Pay suppliers all amounts owed. 
D)  Delay purchases from suppliers until after the end of the fiscal year.

Question 6

Comprehensive income includes all of the following, except

Accepted Answer

A)  revenues and gains. 
B)  expenses and losses. 
C)  preference share dividends. 
D)  unrealized gains and losses on non-trading equity securities. 
A)  revenues and gains. 
B)  expenses and losses. 
C)  preference share dividends. 
D)  unrealized gains and losses on non-trading equity securities.

Question 7

The non-controlling interest section of the income statement is shown

Accepted Answer

A)  below net income. 
B)  below income from operations. 
C)  above other income and expenses. 
D)  above income tax. 
A)  below net income. 
B)  below income from operations. 
C)  above other income and expenses. 
D)  above income tax.

Question 8

A company recognizes a change in estimate by making a retrospective adjustment to the financial statements.

Accepted Answer

A) True 
 B)False

Question 9

The IASB takes the position that both revenues and expenses and other income and expense should be reported as part of income from operations.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is an example of managing earnings up?

Accepted Answer

A)  Decreasing estimated salvage value of equipment. 
B)  Writing off obsolete inventory. 
C)  Underestimating warranty claims. 
D)  Accruing a contingent liability for an ongoing lawsuit. 
A)  Decreasing estimated salvage value of equipment. 
B)  Writing off obsolete inventory. 
C)  Underestimating warranty claims. 
D)  Accruing a contingent liability for an ongoing lawsuit.

Question 11

Prior period adjustments can either be added or subtracted in the Retained Earnings Statement.

Accepted Answer

A) True 
 B)False

Question 12

Companies only restrict retained earnings to comply with contractual requirements or current necessity.

Accepted Answer

A) True 
 B)False

Question 13

Given the following income statement line items:
Income from operations
Income before income taxes
Income from continuing operations
Income from discontinued operations
Net income
How many earnings per share amounts are required to be disclosed?

Accepted Answer

A)  5 
B)  4 
C)  3 
D)  2 
A)  5 
B)  4 
C)  3 
D)  2

Question 14

Which of the following is a required disclosure in the income statement when reporting the disposal of a component of the business?

Accepted Answer

A)  The gain or loss on disposal should be reported as an other income item. 
B)  Results of operations of a discontinued component should be disclosed immediately below income from operations. 
C)  Earnings per share from both continuing operations and net income should be disclosed on the face of the income statement. 
D)  The gain or loss on disposal should not be segregated, but should be reported together with the results of continuing operations. 
A)  The gain or loss on disposal should be reported as an other income item. 
B)  Results of operations of a discontinued component should be disclosed immediately below income from operations. 
C)  Earnings per share from both continuing operations and net income should be disclosed on the face of the income statement. 
D)  The gain or loss on disposal should not be segregated, but should be reported together with the results of continuing operations.

Question 15

Intraperiod tax allocation relates the income tax expense of the period to the specific items that give rise to the amount of the tax provision.

Accepted Answer

A) True 
 B)False

Question 16

Both revenues and gains increase both net income and equity.

Accepted Answer

A) True 
 B)False

Question 17

Investors and creditors use income statement information for each of the following
Except to

Accepted Answer

A)  evaluate the future performance of the company. 
B)  provide a basis for predicting future performance. 
C)  help assess the risk and uncertainty of achieving future cash flows. 
D)  All of these answers are correct. 
A)  evaluate the future performance of the company. 
B)  provide a basis for predicting future performance. 
C)  help assess the risk and uncertainty of achieving future cash flows. 
D)  All of these answers are correct.

Question 18

A company that reports a discontinued operation has the option of reporting per share amounts for this item.

Accepted Answer

A) True 
 B)False

Question 19

Discontinued operations and gains and losses are both reported net of tax in the income statement.

Accepted Answer

A) True 
 B)False

Question 20

Comprehensive income includes all changes in equity during a period except those resulting from distributions to owners.

Accepted Answer

A) True 
 B)False

If a company prepares a consolidated income statement, IFRS requires that net income be reported for

Companies use intraperiod tax allocation for all of the following items except

Companies report the results of operations of a component of a business that will be disposed of separately from continuing operations.

Which of the following equations expresses the definition of "income"?

What might a manager do during the last quarter of a fiscal year if she wanted to decrease current annual net income?

Comprehensive income includes all of the following, except

The non-controlling interest section of the income statement is shown

A company recognizes a change in estimate by making a retrospective adjustment to the financial statements.

The IASB takes the position that both revenues and expenses and other income and expense should be reported as part of income from operations.

Which of the following is an example of managing earnings up?

Prior period adjustments can either be added or subtracted in the Retained Earnings Statement.

Companies only restrict retained earnings to comply with contractual requirements or current necessity.

Given the following income statement line items: Income from operations Income before income taxes Income from continuing operations Income from discontinued operations Net income How many earnings per share amounts are required to be disclosed?

Which of the following is a required disclosure in the income statement when reporting the disposal of a component of the business?

Intraperiod tax allocation relates the income tax expense of the period to the specific items that give rise to the amount of the tax provision.

Both revenues and gains increase both net income and equity.

Investors and creditors use income statement information for each of the following Except to

A company that reports a discontinued operation has the option of reporting per share amounts for this item.

Discontinued operations and gains and losses are both reported net of tax in the income statement.

Comprehensive income includes all changes in equity during a period except those resulting from distributions to owners.

Financial Reporting and Accounting Standards

Conceptual Framework for Financial Reporting

The Accounting Information System

Statement of Financial Position and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Filters

Exam 4: Income Statement and Related Information

If a company prepares a consolidated income statement, IFRS requires that net income be reported for

Companies use intraperiod tax allocation for all of the following items except

Companies report the results of operations of a component of a business that will be disposed of separately from continuing operations.

Which of the following equations expresses the definition of "income"?

What might a manager do during the last quarter of a fiscal year if she wanted to decrease current annual net income?

Comprehensive income includes all of the following, except

The non-controlling interest section of the income statement is shown

A company recognizes a change in estimate by making a retrospective adjustment to the financial statements.

The IASB takes the position that both revenues and expenses and other income and expense should be reported as part of income from operations.

Which of the following is an example of managing earnings up?

Prior period adjustments can either be added or subtracted in the Retained Earnings Statement.

Companies only restrict retained earnings to comply with contractual requirements or current necessity.

Given the following income statement line items: Income from operations Income before income taxes Income from continuing operations Income from discontinued operations Net income How many earnings per share amounts are required to be disclosed?

Which of the following is a required disclosure in the income statement when reporting the disposal of a component of the business?

Intraperiod tax allocation relates the income tax expense of the period to the specific items that give rise to the amount of the tax provision.

Both revenues and gains increase both net income and equity.

Investors and creditors use income statement information for each of the following Except to

A company that reports a discontinued operation has the option of reporting per share amounts for this item.

Discontinued operations and gains and losses are both reported net of tax in the income statement.

Comprehensive income includes all changes in equity during a period except those resulting from distributions to owners.

Financial Reporting and Accounting Standards

Conceptual Framework for Financial Reporting

The Accounting Information System

Statement of Financial Position and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Filters