Question 1

Intraperiod income tax allocation:

Accepted Answer

A) Involves the allocation of income taxes between current and future periods. 
B) Arises because items included in the determination of taxable income may be presented in different parts of the financial statements. 
C) Arises because certain revenues and expenses appear on the financial statements either before or after they are included on the income tax return. 
D) Involves items appearing above income from continuing operations in the income statement. 
A) Involves the allocation of income taxes between current and future periods. 
B) Arises because items included in the determination of taxable income may be presented in different parts of the financial statements. 
C) Arises because certain revenues and expenses appear on the financial statements either before or after they are included on the income tax return. 
D) Involves items appearing above income from continuing operations in the income statement.

Question 2

Accounting income is a less complete measurement of wealth than is economic income.

Accepted Answer

A) True 
 B)False

Question 3

A company sold a used operational asset at a $20,000 loss.The loss should be classified on the income statement as:

Accepted Answer

A) Other income and losses. 
B) other comprehensive income. 
C) an unusual or infrequent item. 
D) an operating expense. 
A) Other income and losses. 
B) other comprehensive income. 
C) an unusual or infrequent item. 
D) an operating expense.

Question 4

On January 2,2004 a repair cost of $2,000 was incorrectly debited to the equipment account.Equipment is being depreciated on a straight-line basis over a 10 year life with salvage value of 10 percent.The correcting entry for the calendar year end company,on January 20,2007 (the date the error was discovered,after closing entries had been recorded for 2006) would include a:

Accepted Answer

A) credit to accumulated depreciation for $1,080 
B) credit to retained earnings for $2,000 
C) debit to equipment for $2,000 
D) debit to retained earnings for $1,460 
A) credit to accumulated depreciation for $1,080 
B) credit to retained earnings for $2,000 
C) debit to equipment for $2,000 
D) debit to retained earnings for $1,460

Question 5

Based on the following data,compute the amount of rent revenue that should be reported on the 2002 income statement.Show computations.
Balance of account at:   2002 rent revenue is $______________________.

Accepted Answer

$160,600 ($160,000 -

Question 6

When individual assets and liabilities within a disposal group change in value,these changes are:

Accepted Answer

A) Ignored, since the disposal group will be sold as a whole. 
B) Charged to Retained Earnings. 
C) Charged to Other Comprehensive Income. 
D) Reflected on the income statement. 
A) Ignored, since the disposal group will be sold as a whole. 
B) Charged to Retained Earnings. 
C) Charged to Other Comprehensive Income. 
D) Reflected on the income statement.

Question 7

Depreciation is not taken on assets that are temporarily idle but have not been abandoned.

Accepted Answer

A) True 
 B)False

Question 8

Under IFRS,depreciation expense and employee benefits expense may be shown on the face of the income statement OR may be disclosed separately in the notes to the financial statements.

Accepted Answer

A) True 
 B)False

Question 9

IFRS 5 defines a discontinued operation as an operating segment of a company that:

Accepted Answer

A) has been sold. 
B) is held for sale. 
C) has been sold or is held for -sale. 
D) is no longer under management control. 
A) has been sold. 
B) is held for sale. 
C) has been sold or is held for -sale. 
D) is no longer under management control.

Question 10

In preparing the adjusting journal entries for Year 4,the accountant for a large local law firm discovered that depreciation on furniture,fixtures and office equipment was understated by $40,000 for Year 3.The previous accountant had not depreciated a leasehold improvement because she believed that the improvement would revert to the office owner at the end of the lease term.The present accountant,knowing better,prepared the journal entry to make the correction.That entry,assuming a tax rate of 30%,would include which of the following:

Accepted Answer

A) cr.retained earnings $28,000 
B) cr.accumulated depreciation $28,000 
C) dr.retained earnings $28,000 
D) dr.depreciation expense $28,000 
A) cr.retained earnings $28,000 
B) cr.accumulated depreciation $28,000 
C) dr.retained earnings $28,000 
D) dr.depreciation expense $28,000

Intraperiod income tax allocation:

Accounting income is a less complete measurement of wealth than is economic income.

A company sold a used operational asset at a $20,000 loss.The loss should be classified on the income statement as:

Based on the following data,compute the amount of rent revenue that should be reported on the 2002 income statement.Show computations. Balance of account at: 2002 rent revenue is $______________________.

When individual assets and liabilities within a disposal group change in value,these changes are:

Depreciation is not taken on assets that are temporarily idle but have not been abandoned.

Under IFRS,depreciation expense and employee benefits expense may be shown on the face of the income statement OR may be disclosed separately in the notes to the financial statements.

IFRS 5 defines a discontinued operation as an operating segment of a company that:

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

Intraperiod income tax allocation:

Accounting income is a less complete measurement of wealth than is economic income.

A company sold a used operational asset at a $20,000 loss.The loss should be classified on the income statement as:

Based on the following data,compute the amount of rent revenue that should be reported on the 2002 income statement.Show computations. Balance of account at: 2002 rent revenue is $______________________.

When individual assets and liabilities within a disposal group change in value,these changes are:

Depreciation is not taken on assets that are temporarily idle but have not been abandoned.

Under IFRS,depreciation expense and employee benefits expense may be shown on the face of the income statement OR may be disclosed separately in the notes to the financial statements.

IFRS 5 defines a discontinued operation as an operating segment of a company that:

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