Question 1

Under IFRS other comprehensive income must be displayed (reported) in

Accepted Answer

A) the equity section of the statement of financial position. 
B) a second income statement. 
C) the comprehensive income statement or the income statement and comprehensive income statement. 
D) the retained earnings the statement. 
A) the equity section of the statement of financial position. 
B) a second income statement. 
C) the comprehensive income statement or the income statement and comprehensive income statement. 
D) the retained earnings the statement.

Question 2

The earnings per share computation is not required for

Accepted Answer

A) Net income. 
B) Gain on disposal of discontinued operation, net of tax. 
C) Income from continuing operations. 
D) Income from operations. 
A) Net income. 
B) Gain on disposal of discontinued operation, net of tax. 
C) Income from continuing operations. 
D) Income from operations.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is true about intraperiod tax allocation?

Accepted Answer

A) It arises because certain revenue and expense items appear in the income statement either before or after they are included in the tax return. 
B) It is required for the cumulative effect of accounting changes but not for prior period adjustments. 
C) Its purpose is to allocate income tax expense evenly over a number of accounting periods. 
D) Its purpose is to relate the income tax expense to the items which affect the amount of tax. 
A) It arises because certain revenue and expense items appear in the income statement either before or after they are included in the tax return. 
B) It is required for the cumulative effect of accounting changes but not for prior period adjustments. 
C) Its purpose is to allocate income tax expense evenly over a number of accounting periods. 
D) Its purpose is to relate the income tax expense to the items which affect the amount of tax.

Question 6

Income from operations represents a company's results before any gain or loss on discontinued operations.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is included in comprehensive income?

Accepted Answer

A) Investments by owners. 
B) Unrealized gains on non-trading equity securities. 
C) Distributions to owners. 
D) Changes in accounting principles. 
A) Investments by owners. 
B) Unrealized gains on non-trading equity securities. 
C) Distributions to owners. 
D) Changes in accounting principles.

Question 8

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

Question 9

Undeclared dividends are deducted from net income in the earnings per share computation for which type of preference shares?

Accepted Answer

A) Non-cumulative only. 
B) Cumulative only. 
C) Neither non-cumulative nor cumulative. 
D) Both non-cumulative and cumulative. 
A) Non-cumulative only. 
B) Cumulative only. 
C) Neither non-cumulative nor cumulative. 
D) Both non-cumulative and cumulative.

Question 10

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 11

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 12

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 13

IFRS requires that a single amount be disclosed within the income statement for

Accepted Answer

A) the post-tax profit/loss on discontinued operations and the pre-tax gain/loss on the disposal of discontinued operational assets. 
B) the pre-tax profit/loss on discontinued operations and the post-tax gain/loss on the disposal of discontinued operational assets. 
C) the pre-tax profit/loss on discontinued operations and the pre-tax gain/loss on the disposal of discontinued operational assets. 
D) the post-tax profit/loss on discontinued operations and the post-tax gain/loss on the disposal of discontinued operational assets. 
A) the post-tax profit/loss on discontinued operations and the pre-tax gain/loss on the disposal of discontinued operational assets. 
B) the pre-tax profit/loss on discontinued operations and the post-tax gain/loss on the disposal of discontinued operational assets. 
C) the pre-tax profit/loss on discontinued operations and the pre-tax gain/loss on the disposal of discontinued operational assets. 
D) the post-tax profit/loss on discontinued operations and the post-tax gain/loss on the disposal of discontinued operational assets.

Question 14

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 15

Which of the following is not a selling expense?

Accepted Answer

A) Advertising expense. 
B) Office salaries expense. 
C) Freight-out. 
D) Store supplies consumed. 
A) Advertising expense. 
B) Office salaries expense. 
C) Freight-out. 
D) Store supplies consumed.

Question 16

The definition of expenses includes

Accepted Answer

A) losses only. 
B) expenses and losses. 
C) expenses only. 
D) expenses, losses and unrealized losses on available-for-sale securities. 
A) losses only. 
B) expenses and losses. 
C) expenses only. 
D) expenses, losses and unrealized losses on available-for-sale securities.

Question 17

A change in accounting principle requires what kind of adjustment to the financial statements?

Accepted Answer

A) Current period adjustment. 
B) Prospective adjustment. 
C) Retrospective adjustment. 
D) Current and prospective adjustment. 
A) Current period adjustment. 
B) Prospective adjustment. 
C) Retrospective adjustment. 
D) Current and prospective adjustment.

Question 18

Gains or losses on the disposal of investments should be shown in the income statement

Accepted Answer

The answer of Gains or losses on the disposal of...

Question 19

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 20

The occurrence that most likely would have no effect on 2015 net income is the

Accepted Answer

A) sale in 2015 of an office building contributed by a stockholder in 1966. 
B) collection in 2015 of a dividend from an investment. 
C) correction of an error in the financial statements of a prior period discovered subsequent to their issuance. 
D) stock purchased in 2001 deemed worthless in 2015. 
A) sale in 2015 of an office building contributed by a stockholder in 1966. 
B) collection in 2015 of a dividend from an investment. 
C) correction of an error in the financial statements of a prior period discovered subsequent to their issuance. 
D) stock purchased in 2001 deemed worthless in 2015.

Exam 4: Income Statement and Related Information

Under IFRS other comprehensive income must be displayed (reported) in

The earnings per share computation is not required for

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

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

Which of the following is true about intraperiod tax allocation?

Income from operations represents a company's results before any gain or loss on discontinued operations.

Which of the following is included in comprehensive income?

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

Undeclared dividends are deducted from net income in the earnings per share computation for which type of preference shares?

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 an example of managing earnings up?

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.

IFRS requires that a single amount be disclosed within the income statement for

Comprehensive income includes all of the following, except

Which of the following is not a selling expense?

The definition of expenses includes

A change in accounting principle requires what kind of adjustment to the financial statements?

Gains or losses on the disposal of investments should be shown in the income statement

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

The occurrence that most likely would have no effect on 2015 net income is the

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

Current Liabilities, Provisions, and Contingencies

Non-Current Liabilities

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

Presentation and Disclosure in Financialreporting

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