Question 1

Which of the following items does IFRS require to be disclosed but not necessarily presented on the income statement?

Accepted Answer

A) litigation settlements 
B) finance costs 
C) turnover 
D) income of associates 
A) litigation settlements 
B) finance costs 
C) turnover 
D) income of associates

Question 2

Which of the following is the key performance measure reported on the income statement that is typically presented first in sequence?

Accepted Answer

A) sales revenue 
B) income from continuing operations 
C) gross profit 
D) operating income 
A) sales revenue 
B) income from continuing operations 
C) gross profit 
D) operating income

Question 3

Gains and losses from discontinued operations are shown on the income statement after the provision for income taxes is presented.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is typically included in the determination of income from continuing operations?

Accepted Answer

A) other comprehensive income 
B) non-operating gains and losses 
C) gain on disposal of discontinued segment 
D) reserved retained earnings 
A) other comprehensive income 
B) non-operating gains and losses 
C) gain on disposal of discontinued segment 
D) reserved retained earnings

Question 5

Identify the six key performance measure subtotals on the statement of net income.

Accepted Answer

Key performance measures on the statemen

Question 6

On the income statement,________ is gross profit less all operating expenses.

Accepted Answer

A) retained earnings 
B) net income 
C) income from continuing operations 
D) operating income 
A) retained earnings 
B) net income 
C) income from continuing operations 
D) operating income

Question 7

Operating income is gross profit less all operating expenses and income taxes.

Accepted Answer

A) True 
 B)False

Question 8

What items are included in a company's results from discontinued operations? For this purpose,how is a component defined?

Accepted Answer

Companies report three main types of inc

Question 9

Bass Steel provided the following partial-trial balance for the current year.Prepare a multi-step statement of comprehensive income for the year ended December 31.Bass Steel is subject to a 30% income tax rate.

Accepted Answer

@#IMG-DLM& 
 @#IMG-DLM& 
 Operating Expenses:Selling Expense

Question 10

The portion of income (loss)attributable to the noncontrolling interest is ________.

Accepted Answer

A) closed to noncontrolling interest in the equity section of the balance sheet 
B) closed to retained earnings in the equity section of the balance sheet 
C) closed to other comprehensive income in the equity section of the balance sheet 
D) not closed to the equity section of the balance sheet 
A) closed to noncontrolling interest in the equity section of the balance sheet 
B) closed to retained earnings in the equity section of the balance sheet 
C) closed to other comprehensive income in the equity section of the balance sheet 
D) not closed to the equity section of the balance sheet

Question 11

Both IFRS and U.S.GAAP permit reporting of comprehensive income in one statement or two statements.

Accepted Answer

A) True 
 B)False

Question 12

Which of the multi-step income statement reports revenues and expenses related to secondary operations of the entity?

Accepted Answer

A) discontinued operations section 
B) secondary section 
C) non-operating section 
D) operating section 
A) discontinued operations section 
B) secondary section 
C) non-operating section 
D) operating section

Question 13

When a large number of line items limits the usefulness of the income statement,companies use a single-step income statement.

Accepted Answer

A) True 
 B)False

Question 14

How are revenues similar to gains and how are they different?

Accepted Answer

Revenues and gains are both inflows or o

Question 15

What are the most common approaches management uses to manipulate earnings?

Accepted Answer

A summary of the approaches management u

Question 16

Presented below are performance measure data from the income statement of Barton Company.
   Barton has 100,000 shares of common stock outstanding.Prepare the summary schedule of earnings per share required by U.S.GAAP.

Accepted Answer

Earnings p

Question 17

Golgotha Industries provided the following partial-trial balance for the current year.Beginning with the line item Income from Continuing Operations Before Taxes,prepare a statement of comprehensive income for the year ended December 31.Golgotha is subject to a 40% income tax rate.

Accepted Answer

@#IMG-DLM& 
 @#IMG-DLM& 
 @#IMG-DLM& 
 @#IMG-DLM& 
 Discontinued Operations:Loss

Question 18

The income tax provision includes all income taxes from every source and every cause.

Accepted Answer

A) True 
 B)False

Question 19

Morton Company has the following transactions in the current year.Assuming that all of the transactions are material,which of them will most likely have no effect on current year net income?

Accepted Answer

A) advance in technology that renders certain inventory items obsolete 
B) retirement of callable bonds at a premium 
C) sale of used equipment that had been fully depreciated in prior years 
D) increase in the fair value of certain available-for-sale securities held as an investment 
A) advance in technology that renders certain inventory items obsolete 
B) retirement of callable bonds at a premium 
C) sale of used equipment that had been fully depreciated in prior years 
D) increase in the fair value of certain available-for-sale securities held as an investment

Question 20

When a company decides to discontinue an operation,it values the assets and liabilities of that operation at ________.

Accepted Answer

A) gross book value (historical cost) 
B) net book value (historical cost less accumulated depreciation) 
C) gross current value (fair value) 
D) net current cost (fair value less selling costs) 
A) gross book value (historical cost) 
B) net book value (historical cost less accumulated depreciation) 
C) gross current value (fair value) 
D) net current cost (fair value less selling costs)

Exam 5: Statements of Net Income and Comprehensive Net Income

Which of the following items does IFRS require to be disclosed but not necessarily presented on the income statement?

Which of the following is the key performance measure reported on the income statement that is typically presented first in sequence?

Gains and losses from discontinued operations are shown on the income statement after the provision for income taxes is presented.

Which of the following is typically included in the determination of income from continuing operations?

Identify the six key performance measure subtotals on the statement of net income.

On the income statement,________ is gross profit less all operating expenses.

Operating income is gross profit less all operating expenses and income taxes.

What items are included in a company's results from discontinued operations? For this purpose,how is a component defined?

Bass Steel provided the following partial-trial balance for the current year.Prepare a multi-step statement of comprehensive income for the year ended December 31.Bass Steel is subject to a 30% income tax rate.

The portion of income (loss)attributable to the noncontrolling interest is ________.

Both IFRS and U.S.GAAP permit reporting of comprehensive income in one statement or two statements.

Which of the multi-step income statement reports revenues and expenses related to secondary operations of the entity?

When a large number of line items limits the usefulness of the income statement,companies use a single-step income statement.

How are revenues similar to gains and how are they different?

What are the most common approaches management uses to manipulate earnings?

Presented below are performance measure data from the income statement of Barton Company. Barton has 100,000 shares of common stock outstanding.Prepare the summary schedule of earnings per share required by U.S.GAAP.

Golgotha Industries provided the following partial-trial balance for the current year.Beginning with the line item Income from Continuing Operations Before Taxes,prepare a statement of comprehensive income for the year ended December 31.Golgotha is subject to a 40% income tax rate.

The income tax provision includes all income taxes from every source and every cause.

Morton Company has the following transactions in the current year.Assuming that all of the transactions are material,which of them will most likely have no effect on current year net income?

When a company decides to discontinue an operation,it values the assets and liabilities of that operation at ________.

The Financial Reporting Environment

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Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

Revenue Recognition

OL: Revenue Recognition

Short-Term Operating Assets: Cash and Receivables

Short-Term Operating Assets: Inventory

Long-Term Operating Assets: Acquisition, cost Allocation, and Derecognition

Long-Term Operating Assets: Departures From Historical Cost

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OL: Operating Liabilities and Contingencies

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

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