Question 1

Under IFRS,a discontinued operation must be a:

Accepted Answer

A) Product line. 
B) Geographic segment. 
C) Product line or Geographic segment. 
D) Cash Generating Unit (CGU). 
A) Product line. 
B) Geographic segment. 
C) Product line or Geographic segment. 
D) Cash Generating Unit (CGU).

Question 2

A partial income statement for a company's most recent fiscal year follows:   Additional data:
Selling expenses are 20 percent of sales,administrative expenses are 10 percent of cost of goods sold; the income tax rate is 40 percent.
Required:
Supply dollar amounts for blanks a through h.

Accepted Answer

In order of computation:
(c) $550,000 ($

Question 3

The realization of a previously unrealized gain or loss during a given period has no effect on the company's total shareholder equity.

Accepted Answer

A) True 
 B)False

Question 4

King Corporation decided to sell its sporting goods business segment for $900,000,on September 1,Year 1,which is also the disposal date.The book value of the segment's net assets is $700,000 on this date.The pre-tax income for the segment for the period January 1 - September 1,Year 1,was $20,000.Assuming a tax rate of 40%,choose the correct reporting for discontinued operations in the income statement of King Corporation,for the year ended December 31,Year 1. $$\begin{array} { | l | l | l | } 
\hline & \text { Income (loss) from } & \text { Gain (loss) from disposal } \
\hline & \text { Discontinued operations } & \text { of discontinued operations } \
\hline 1 & \$ 20,000 & \$ 200,000 \
\hline 2 & \$ 132,000 & \$ 0 \
\hline 3 & \$ 12,000 & \$ 120,000 \
\hline 4 & \$ 0 & \$ 132,000 \
\hline
\end{array}$$

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 5

The operating losses and gain or loss from a discontinued operation must be shown net of tax in a distinct section on the statement of income.

Accepted Answer

A) True 
 B)False

Question 6

Accounting income is a concept in which:

Accepted Answer

A) Income is measured as the amount of "real wealth" that an entity could consume during a period and be as well off at the end of that period as it was at the beginning. 
B) Market values adjusted for the effects of inflation or deflation are used to calculate real wealth. 
C) The transactions approach is used to record revenues, expenses, gains and losses throughout the reporting period. 
D) Income equals the change in market value of the firm's outstanding common stock for the period. 
A) Income is measured as the amount of "real wealth" that an entity could consume during a period and be as well off at the end of that period as it was at the beginning. 
B) Market values adjusted for the effects of inflation or deflation are used to calculate real wealth. 
C) The transactions approach is used to record revenues, expenses, gains and losses throughout the reporting period. 
D) Income equals the change in market value of the firm's outstanding common stock for the period.

Question 7

A corporation started operations on January 1,2001; the reporting period ends December 31.At the end of 2001,the company's records reflected the following correct amounts after all adjusting entries: Sales revenue,$400,000; Cost of goods sold,$232,500; Other expenses (total),$70,000; Accrued wages payable,$1,500; Accounts payable,$6,000 and Accounts receivable,$4,500.
(a) Net income,accrual basis,was $_______________.
(b) Net income,cash basis $__________________.

Accepted Answer

The answer of A corporation started operations on January 1,2001;...

Question 8

Under both ASPE and IFRS,a discontinued operation must be a reportable segment.

Accepted Answer

A) True 
 B)False

Question 9

On January 2,2008,a repair cost of $4,000 was incorrectly debited to the related machinery account.The machine was acquired January 1,2005.Machinery is being depreciated on a straight-line basis at 10 percent per year with a 10 percent residual value.Give the correcting entry on January 2,2011 (the date the error was discovered),ignoring the income tax effect.

Accepted Answer

Accumulate

Question 10

An event is considered to occur infrequently if it would not reasonably be expected to recur in the foreseeable future,taking into account the entity's operating environment.

Accepted Answer

A) True 
 B)False

Question 11

The issuance of new common shares and retirement of outstanding shares would be reported in comprehensive income.

Accepted Answer

A) True 
 B)False

Question 12

At the end of 2008,and before any adjusting entries were made,a company discovered that a tract of land (used as a parking lot next to the newly completed office building) that had been purchased for $20,000 cash on January 1,2005,was debited in full to the office building account on that date.The building was being depreciated over a 20-year life with no residual value (straight-line).Assume a 25 percent tax rate.
(a) Correct all of the accounts (omit income tax effect).
(b) Record the income tax effects (assume income tax for 2008 has not yet been paid).

Accepted Answer

@#IMG-DLM& ($20,000

Question 13

Only non-current assets may be reclassified as Assets Held for Sale.

Accepted Answer

A) True 
 B)False

Question 14

Under ASPE,foreign exchange translation gains or losses are charged to:

Accepted Answer

A) Net earnings 
B) Retained earnings 
C) Other comprehensive Income 
D) A separate component of Shareholder equity entitled "Cumulative Translations Gains and Losses" 
A) Net earnings 
B) Retained earnings 
C) Other comprehensive Income 
D) A separate component of Shareholder equity entitled "Cumulative Translations Gains and Losses"

Question 15

Under,IFRS,a loss should be presented separately as a component of income from continuing operations when it is unusual in nature and which of the following? $$\begin{array} { | l | c | c | } 
\hline & \text { Material } & \text { Infrequent in } \
\hline & \text { in Amount } & \text { Occurrence } \
\hline 1 & \text { Yes } & \text { No } \
\hline 2 & \text { Yes } & \text { Yes } \
\hline 3 & \text { No } & \text { Yes } \
\hline 4 & \text { No } & \text { No } \
\hline
\end{array}$$

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 16

Once any unrealized gains or losses included in Other Comprehensive Income are realized,they are transferred to the income statement.

Accepted Answer

A) True 
 B)False

Question 17

A company which lost part of its accounting system in a fire is having trouble determining what its net income is for the current year.The following correct adjusted balances and additional information for the current year are available:   Additional information for the year:   Other than earnings and the events listed above,no other events or transactions affected owners' Equity in the current year.What was net income for the current year?

Accepted Answer

A) $12,000 
B) $22,000 
C) $17,000 
D) $16,000 
A) $12,000 
B) $22,000 
C) $17,000 
D) $16,000

Question 18

All elements of OCI must eventually be recycled to the income statement.

Accepted Answer

A) True 
 B)False

Question 19

A company had 30,000 shares of common stock outstanding on January 1,2010.An additional 10,000 shares were sold and issued on June 1 and 20,000 more were sold and issued on December 1.Pre-tax income for the year was $320,000.The income tax rate was 40 percent.Earnings per share were:

Accepted Answer

A) $3.33 
B) $6.67 
C) $4.00 
D) $3.20 
A) $3.33 
B) $6.67 
C) $4.00 
D) $3.20

Question 20

A disposal group may include both current and non-current assets.

Accepted Answer

A) True 
 B)False

Under IFRS,a discontinued operation must be a:

A partial income statement for a company's most recent fiscal year follows: Additional data: Selling expenses are 20 percent of sales,administrative expenses are 10 percent of cost of goods sold; the income tax rate is 40 percent. Required: Supply dollar amounts for blanks a through h.

The realization of a previously unrealized gain or loss during a given period has no effect on the company's total shareholder equity.

The operating losses and gain or loss from a discontinued operation must be shown net of tax in a distinct section on the statement of income.

Accounting income is a concept in which:

Under both ASPE and IFRS,a discontinued operation must be a reportable segment.

An event is considered to occur infrequently if it would not reasonably be expected to recur in the foreseeable future,taking into account the entity's operating environment.

The issuance of new common shares and retirement of outstanding shares would be reported in comprehensive income.

Only non-current assets may be reclassified as Assets Held for Sale.

Under ASPE,foreign exchange translation gains or losses are charged to:

Under,IFRS,a loss should be presented separately as a component of income from continuing operations when it is unusual in nature and which of the following? Material Infrequent in in Amount Occurrence 1 Yes No 2 Yes Yes 3 No Yes 4 No No

Once any unrealized gains or losses included in Other Comprehensive Income are realized,they are transferred to the income statement.

All elements of OCI must eventually be recycled to the income statement.

A company had 30,000 shares of common stock outstanding on January 1,2010.An additional 10,000 shares were sold and issued on June 1 and 20,000 more were sold and issued on December 1.Pre-tax income for the year was $320,000.The income tax rate was 40 percent.Earnings per share were:

A disposal group may include both current and non-current assets.

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

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Exam 3: Statements of Income and Comprehensive Income

Under IFRS,a discontinued operation must be a:

A partial income statement for a company's most recent fiscal year follows: Additional data: Selling expenses are 20 percent of sales,administrative expenses are 10 percent of cost of goods sold; the income tax rate is 40 percent. Required: Supply dollar amounts for blanks a through h.

The realization of a previously unrealized gain or loss during a given period has no effect on the company's total shareholder equity.

The operating losses and gain or loss from a discontinued operation must be shown net of tax in a distinct section on the statement of income.

Accounting income is a concept in which:

Under both ASPE and IFRS,a discontinued operation must be a reportable segment.

An event is considered to occur infrequently if it would not reasonably be expected to recur in the foreseeable future,taking into account the entity's operating environment.

The issuance of new common shares and retirement of outstanding shares would be reported in comprehensive income.

Only non-current assets may be reclassified as Assets Held for Sale.

Under ASPE,foreign exchange translation gains or losses are charged to:

Under,IFRS,a loss should be presented separately as a component of income from continuing operations when it is unusual in nature and which of the following? Material Infrequent in in Amount Occurrence 1 Yes No 2 Yes Yes 3 No Yes 4 No No

Once any unrealized gains or losses included in Other Comprehensive Income are realized,they are transferred to the income statement.

All elements of OCI must eventually be recycled to the income statement.

A company had 30,000 shares of common stock outstanding on January 1,2010.An additional 10,000 shares were sold and issued on June 1 and 20,000 more were sold and issued on December 1.Pre-tax income for the year was $320,000.The income tax rate was 40 percent.Earnings per share were:

A disposal group may include both current and non-current assets.

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