Question 1

Earnings per share reporting:

Accepted Answer

A) is mandatory for corporations following IFRS and requires two presentations (basic and fully diluted EPS) when a firm has a complex capital structure. 
B) is required for all corporations with common stock outstanding. 
C) Reveals the relationship between retained earnings available to holders of common stock and the number of shares of common stock outstanding. 
D) Shows the maximum dividend which may be paid. 
A) is mandatory for corporations following IFRS and requires two presentations (basic and fully diluted EPS) when a firm has a complex capital structure. 
B) is required for all corporations with common stock outstanding. 
C) Reveals the relationship between retained earnings available to holders of common stock and the number of shares of common stock outstanding. 
D) Shows the maximum dividend which may be paid. A

Question 2

On January 1,2009,a corporation purchased a truck that cost $20,000.It is being depreciated on a straight line basis over 6 years,with a $2,000 residual value.At the end of 2010,it is determined that the useful life should total 14 years and the residual value should be zero.What is the 2011 depreciation expense?

Accepted Answer

A) $1,000 
B) $600 
C) $1,200 
D) $900 
A) $1,000 
B) $600 
C) $1,200 
D) $900 A

Question 3

A company had 70,000 shares of common stock outstanding throughout the year.Income before taxes and extraordinary items was $166,000.The tax rate was 40 percent.EPS for net income is:

Accepted Answer

A) $1.20 
B) $1.42 
C) $2.00 
D) $2.37 
A) $1.20 
B) $1.42 
C) $2.00 
D) $2.37 B

Question 4

Other comprehensive income includes unrealized gains and losses on Available-for-sale securities.

Accepted Answer

A) True 
 B)False

Question 5

Given the following amounts from an income statement:   The amount shown on a multiple-step format income statement for operating income from continuing operations would be:

Accepted Answer

A) $232 
B) $246 
C) $290 
D) $302 
A) $232 
B) $246 
C) $290 
D) $302

Question 6

The following information has been obtained from the records of Smyth Corporation at December 31,2006:   January 15,2001 (a credit)
Calculate the balance of the Retained Earnings at December 31,2006.

Accepted Answer

The answer of The following information has been obtained from...

Question 7

Jacks Corporation decided to sell its playing card business segment for $600,000,on September 1,Year 1.The disposal date is November 1,Year 1.The book value of the segment's net assets is $550,000.The pre-tax income for the segment for the period January 1 - September 1,Year 1,was a loss of $80,000; the pre-tax income for the segment for September and October was $30,000.Assuming a tax rate of 40%,choose the correct reporting for discontinued operations in the income statement of Jacks Corporation,for the year ended December 31,Year 1.

Accepted Answer

A) Choice 1 
B) Choice 2 
C) Choice 3 
D) Choice 4 
A) Choice 1 
B) Choice 2 
C) Choice 3 
D) Choice 4

Question 8

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 extraordinary items and cumulative effect of accounting changes but not for discontinued operations. 
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 extraordinary items and cumulative effect of accounting changes but not for discontinued operations. 
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 9

The concept of intra-period tax allocation is based on the going concern principle.

Accepted Answer

A) True 
 B)False

Question 10

After an asset held for sale has been written down,it must written back if its fair value less costs to sell subsequently increases under IFRS.

Accepted Answer

A) True 
 B)False

Question 11

Increases in the recoverable value of a total disposal group are:

Accepted Answer

A) Recorded in net income. 
B) Recorded in net income but are limited to the carrying value of the disposal group on the date it was designated as held-for-sale. 
C) Ignored. 
D) Credited to Retained Earnings. 
A) Recorded in net income. 
B) Recorded in net income but are limited to the carrying value of the disposal group on the date it was designated as held-for-sale. 
C) Ignored. 
D) Credited to Retained Earnings.

Question 12

Once an asset has been designated as held for sale,this classification is irrevocable.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is NOT a generally practised method of presenting the income statement?

Accepted Answer

A) Including corrections of errors made in a prior period. 
B) The single-step income statement. 
C) The consolidated statement of income. 
D) Including gains and losses from discontinued operations of a segment of a business in determining net income. 
A) Including corrections of errors made in a prior period. 
B) The single-step income statement. 
C) The consolidated statement of income. 
D) Including gains and losses from discontinued operations of a segment of a business in determining net income.

Question 14

A corporation is developing financial statements for the year ended December 31,2010.The average income tax rate is 30 percent.The following pre-tax data are available: $$\begin{array} { |l | r| } 
\hline\text { Revenues. . . . . . . . . . . . . . . . } & \$ 420,000 \
\hline\text { Expenses. } . \ldots . \ldots \ldots \ldots & 360,000\\hline
\end{array}$$ Loss from Discontinued Operations (pre-tax)$\quad$$\quad$24,000
Correction of prior years' error, (credit).$\quad$$\quad$$\quad$$\quad$22,000 Unrealized foreign exchange gain on translation of foreign subsidiary (net of tax) $10,000
Required:
Assuming all of the above items are subject to the average tax rate of 30%,prepare a statement of Comprehensive Income for the year ended December 31,2010.

Accepted Answer

Statement of Compreh

Question 15

Once an asset has been designated as held for sale it must be re measured to the lower of its carrying value and its fair value less costs to sell.

Accepted Answer

A) True 
 B)False

Question 16

Under IFRS,the parent company's share of any profits or losses arising from joint ventures must be included on the face of Statement of Comprehensive Income.

Accepted Answer

A) True 
 B)False

Question 17

Under IFRS,an expense item must be both presented and disclosed by nature and function.

Accepted Answer

A) True 
 B)False

Question 18

Future costs associated with a restructuring can only be recognized if they:

Accepted Answer

A) will lead to a constructive obligation in the future. 
B) will lead to a legal obligation in the future. 
C) will lead to a constructive and legal obligation in the future. 
D) will lead to a provision for restructuring cost. 
A) will lead to a constructive obligation in the future. 
B) will lead to a legal obligation in the future. 
C) will lead to a constructive and legal obligation in the future. 
D) will lead to a provision for restructuring cost.

Question 19

Which one of the following types of losses is excluded from the determination of net income on the statement of income?

Accepted Answer

A) Material losses resulting from transactions in the company's investments account. 
B) Material losses resulting from unusual sales of assets not acquired for resale. 
C) Material losses resulting from the write-off of intangibles. 
D) Material losses resulting from correction of errors related to prior periods. 
A) Material losses resulting from transactions in the company's investments account. 
B) Material losses resulting from unusual sales of assets not acquired for resale. 
C) Material losses resulting from the write-off of intangibles. 
D) Material losses resulting from correction of errors related to prior periods.

Question 20

The single-step income statement emphasizes

Accepted Answer

A) the gross profit figure. 
B) total revenues and total expenses. 
C) extraordinary items and accounting changes more than these are emphasized in the multiple-step income statement. 
D) the various components of income from continuing operations. 
A) the gross profit figure. 
B) total revenues and total expenses. 
C) extraordinary items and accounting changes more than these are emphasized in the multiple-step income statement. 
D) the various components of income from continuing operations.

Earnings per share reporting:

A company had 70,000 shares of common stock outstanding throughout the year.Income before taxes and extraordinary items was $166,000.The tax rate was 40 percent.EPS for net income is:

Other comprehensive income includes unrealized gains and losses on Available-for-sale securities.

Given the following amounts from an income statement: The amount shown on a multiple-step format income statement for operating income from continuing operations would be:

The following information has been obtained from the records of Smyth Corporation at December 31,2006: January 15,2001 (a credit) Calculate the balance of the Retained Earnings at December 31,2006.

Which of the following is true about intraperiod tax allocation?

The concept of intra-period tax allocation is based on the going concern principle.

After an asset held for sale has been written down,it must written back if its fair value less costs to sell subsequently increases under IFRS.

Increases in the recoverable value of a total disposal group are:

Once an asset has been designated as held for sale,this classification is irrevocable.

Which of the following is NOT a generally practised method of presenting the income statement?

Once an asset has been designated as held for sale it must be re measured to the lower of its carrying value and its fair value less costs to sell.

Under IFRS,the parent company's share of any profits or losses arising from joint ventures must be included on the face of Statement of Comprehensive Income.

Under IFRS,an expense item must be both presented and disclosed by nature and function.

Future costs associated with a restructuring can only be recognized if they:

Which one of the following types of losses is excluded from the determination of net income on the statement of income?

The single-step income statement emphasizes

The Framework for Financial Reporting

Accounting Judgements

Statements of Financial Position and Changes in Equity; Disclosure Notes

The Statement of Cash Flows

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Property,Plant,and Equipment; Intangibles; and Goodwill

Depreciation,Amortization,and Impairment

Financial Instruments: Investments in Debt and Equity Securities

Filters

Exam 3: Statements of Income and Comprehensive Income

Earnings per share reporting:

A company had 70,000 shares of common stock outstanding throughout the year.Income before taxes and extraordinary items was $166,000.The tax rate was 40 percent.EPS for net income is:

Other comprehensive income includes unrealized gains and losses on Available-for-sale securities.

Given the following amounts from an income statement: The amount shown on a multiple-step format income statement for operating income from continuing operations would be:

The following information has been obtained from the records of Smyth Corporation at December 31,2006: January 15,2001 (a credit) Calculate the balance of the Retained Earnings at December 31,2006.

Which of the following is true about intraperiod tax allocation?

The concept of intra-period tax allocation is based on the going concern principle.

After an asset held for sale has been written down,it must written back if its fair value less costs to sell subsequently increases under IFRS.

Increases in the recoverable value of a total disposal group are:

Once an asset has been designated as held for sale,this classification is irrevocable.

Which of the following is NOT a generally practised method of presenting the income statement?

Once an asset has been designated as held for sale it must be re measured to the lower of its carrying value and its fair value less costs to sell.

Under IFRS,the parent company's share of any profits or losses arising from joint ventures must be included on the face of Statement of Comprehensive Income.

Under IFRS,an expense item must be both presented and disclosed by nature and function.

Future costs associated with a restructuring can only be recognized if they:

Which one of the following types of losses is excluded from the determination of net income on the statement of income?

The single-step income statement emphasizes

The Framework for Financial Reporting

Accounting Judgements

Statements of Financial Position and Changes in Equity; Disclosure Notes

The Statement of Cash Flows

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Property,Plant,and Equipment; Intangibles; and Goodwill

Depreciation,Amortization,and Impairment

Financial Instruments: Investments in Debt and Equity Securities

Filters