Question 1

For Mortenson Company, the following information is available:   In Mortenson's multiple-step income statement, gross profit

Accepted Answer

A)  should not be reported 
B)  should be reported at $17,000. 
C)  should be reported at $70,000. 
D)  should be reported at $75,000. 
A)  should not be reported 
B)  should be reported at $17,000. 
C)  should be reported at $70,000. 
D)  should be reported at $75,000.

Question 2

A strength of the income statement as compared to the balance sheet is that items which cannot be measured reliably can be reported in the income statement.

Accepted Answer

A) True 
 B)False

Question 3

Under which of the following conditions would material flood damage be considered an extraordinary item for financial reporting purposes?

Accepted Answer

A)  Only if floods in the geographical area are unusual in nature and occur infrequently. 
B)  Only if the flood damage is material in amount and could have been reduced by prudent management. 
C)  Under any circumstances as an extraordinary item. 
D)  Flood damage should never be classified as an extraordinary item. 
A)  Only if floods in the geographical area are unusual in nature and occur infrequently. 
B)  Only if the flood damage is material in amount and could have been reduced by prudent management. 
C)  Under any circumstances as an extraordinary item. 
D)  Flood damage should never be classified as an extraordinary item.

Question 4

The single-step income statement emphasizes

Accepted Answer

A)  the gross profit figure. 
B)  total revenues and total expenses. 
C)  operating and non-operating expenses. 
D)  the various components of income from continuing operations. 
A)  the gross profit figure. 
B)  total revenues and total expenses. 
C)  operating and non-operating expenses. 
D)  the various components of income from continuing operations.

Question 5

Earnings per share data are required on the face of the

Accepted Answer

A)  statement of retained earnings 
B)  statement of stockholders' equity 
C)  income statement 
D)  balance sheet 
A)  statement of retained earnings 
B)  statement of stockholders' equity 
C)  income statement 
D)  balance sheet

Question 6

Garwood Company has the following items: write-down of inventories, $360,000; loss on disposal of Sports Division, $555,000; and loss due to an expropriation, $359,000. Ignoring income taxes, what amount should Garwood Company report as extraordinary losses?

Accepted Answer

A)  $359,000 
B)  $555,000. 
C)  $719,000. 
D)  $914,000. 
A)  $359,000 
B)  $555,000. 
C)  $719,000. 
D)  $914,000.

Question 7

The IFRS income statement classification of expenses by nature results in descriptionswhich include all of the following except

Accepted Answer

A)  salaries 
B)  depreciation 
C)  distribution 
D)  utilities 
A)  salaries 
B)  depreciation 
C)  distribution 
D)  utilities

Question 8

For the year ended December 31, 2014, Transformers Inc. reported the following:   What would Transformers report as total stockholders' equity?

Accepted Answer

A)  $516,000 
B)  $504,000 
C)  $384,000 
D)  $360,000 
A)  $516,000 
B)  $504,000 
C)  $384,000 
D)  $360,000

Question 9

Income statement disclosures.What is disclosed in an income statement? Be specific.

Accepted Answer

An income statement discloses revenues,

Question 10

For the year ended December 31, 2014, Transformers Inc. reported the following:   What would Transformers report as its ending balance of Accumulated OtherComprehensive Income?

Accepted Answer

A)  $18,000 
B)  $15,000 
C)  $12,000 
D)  $3,000 
A)  $18,000 
B)  $15,000 
C)  $12,000 
D)  $3,000

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Where must earnings per share be disclosed in the financial statements to satisfy generally accepted accounting principles?

Accepted Answer

A)  On the face of the statement of retained earnings (or, statement of stockholders' equity.) 
B)  In the footnotes to the financial statements. 
C)  On the face of the income statement. 
D)  On the face of the balance sheet. 
A)  On the face of the statement of retained earnings (or, statement of stockholders' equity.) 
B)  In the footnotes to the financial statements. 
C)  On the face of the income statement. 
D)  On the face of the balance sheet.

Question 13

Moorman Corporation reports the following information:Correction of understatement of depreciation expense   Moorman should report retained earnings, 1/1/14, as adjusted at

Accepted Answer

A)  $3,140,000. 
B)  $4,000,000. 
C)  $4,860,000. 
D)  $6,220,000. 
A)  $3,140,000. 
B)  $4,000,000. 
C)  $4,860,000. 
D)  $6,220,000.

Question 14

The following items were among those that were reported on Dye Co.'s income statement for the year ended December 31, 2014:   The office space is used equally by Dye's sales and accounting departments. What amount of the above-listed items should be classified as general and administrative expenses in Dye's multiple-step income statement?

Accepted Answer

A)  $880,000. 
B)  $1,020,000. 
C)  $1,240,000. 
D)  $1,720,000. 
A)  $880,000. 
B)  $1,020,000. 
C)  $1,240,000. 
D)  $1,720,000.

Question 15

Which of the following is true about the information provided in the income statement?

Accepted Answer

A)  It helps in evaluating the past performance of the enterprise. 
B)  It provides a basis for predicting future performance. 
C)  It helps assess the risk or uncertainty of achieving future cash flows. 
D)  All of these answer choices are correct. 
A)  It helps in evaluating the past performance of the enterprise. 
B)  It provides a basis for predicting future performance. 
C)  It helps assess the risk or uncertainty of achieving future cash flows. 
D)  All of these answer choices are correct.

Question 16

Logan Corp.'s trial balance of income statement accounts for the year ended December 31, 2014 included the following:   Other information:Logan's income tax rate is 30%. Finished goods inventory:January 1, 2014 $160,000December 31, 2014 140,000On Logan's multiple-step income statement for 2014,Extraordinary loss is

Accepted Answer

A)  $16,800. 
B)  $24,000. 
C)  $29,400. 
D)  $42,000. 
A)  $16,800. 
B)  $24,000. 
C)  $29,400. 
D)  $42,000.

Question 17

Which of the following is false about an income statement?

Accepted Answer

A)  Items that cannot be measured reliably are not reported in the income statement. 
B)  It is used to measure the solvency of a company. 
C)  Income measurement involves judgment. 
D)  Income numbers are affected by the accounting methods employed. 
A)  Items that cannot be measured reliably are not reported in the income statement. 
B)  It is used to measure the solvency of a company. 
C)  Income measurement involves judgment. 
D)  Income numbers are affected by the accounting methods employed.

Question 18

In 2014, Esther Corporation reported net income of $600,000. It declared and paid preferred stock dividends of $150,000 and common stock dividends of $60,000. During 2014, Esther had a weighted average of 250,000 common shares outstanding. Compute Esther's 2014 earnings per share.

Accepted Answer

A)  $1.56 
B)  $1.80 
C)  $2.40 
D)  $3.00 
A)  $1.56 
B)  $1.80 
C)  $2.40 
D)  $3.00

Question 19

James, Inc. incurred the following infrequent losses during 2014:A $210,000 write-down of equipment leased to others.A $120,000 adjustment of accruals on long-term contracts.A $180,000 write-off of obsolete inventory.In its 2014 income statement, what amount should James report as total infrequent losses that are not considered extraordinary?

Accepted Answer

A)  $510,000. 
B)  $390,000. 
C)  $330,000. 
D)  $300,000. 
A)  $510,000. 
B)  $390,000. 
C)  $330,000. 
D)  $300,000.

Question 20

Earnings per share should always be shown separately for

Accepted Answer

A)  net income and gross margin. 
B)  net income and pretax income. 
C)  income before extraordinary items. 
D)  extraordinary items and prior period adjustments. 
A)  net income and gross margin. 
B)  net income and pretax income. 
C)  income before extraordinary items. 
D)  extraordinary items and prior period adjustments.

Exam 4: Income Statement and Related Information

For Mortenson Company, the following information is available: In Mortenson's multiple-step income statement, gross profit

A strength of the income statement as compared to the balance sheet is that items which cannot be measured reliably can be reported in the income statement.

Under which of the following conditions would material flood damage be considered an extraordinary item for financial reporting purposes?

The single-step income statement emphasizes

Earnings per share data are required on the face of the

Garwood Company has the following items: write-down of inventories, $360,000; loss on disposal of Sports Division, $555,000; and loss due to an expropriation, $359,000. Ignoring income taxes, what amount should Garwood Company report as extraordinary losses?

The IFRS income statement classification of expenses by nature results in descriptionswhich include all of the following except

For the year ended December 31, 2014, Transformers Inc. reported the following: What would Transformers report as total stockholders' equity?

Income statement disclosures.What is disclosed in an income statement? Be specific.

For the year ended December 31, 2014, Transformers Inc. reported the following: What would Transformers report as its ending balance of Accumulated OtherComprehensive Income?

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

Where must earnings per share be disclosed in the financial statements to satisfy generally accepted accounting principles?

Moorman Corporation reports the following information:Correction of understatement of depreciation expense Moorman should report retained earnings, 1/1/14, as adjusted at

Which of the following is true about the information provided in the income statement?

Which of the following is false about an income statement?

In 2014, Esther Corporation reported net income of $600,000. It declared and paid preferred stock dividends of $150,000 and common stock dividends of $60,000. During 2014, Esther had a weighted average of 250,000 common shares outstanding. Compute Esther's 2014 earnings per share.

Earnings per share should always be shown separately for

Financial Accounting and Accounting Standards

Conceptual Framework for Financial Reporting

The Accounting Information System

Balance Sheet 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

Current Liabilities and Contingencies

Long-Term Liabilities

Stockholders Equity

Dilutive Securities and Earnings Per Share

Investments

Revenue Recognition

Accounting for Income Taxes

Accounting for Pensions and Postretirement Benefits

Accounting for Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Full Disclosure in Financial Reporting

Appendix

Filters