Exam 5: Income Statement: Reporting Results of Operating Activities

Certain merchandise that a firm may acquire may be inventory or supplies.Accounting treats them differently as to the matching criteria used. Required: a. Describe the situation where merchandise would be considered inventory. How would the firm account for the costs of the merchandise? b. Describe the situation where merchandise would be considered supplies. How would the firm account for the costs of the merchandise?

All of the following is/are components of comprehensive income except

_____ reflect the decrease in shareholders' equity resulting from the decrease in the net assets consumed during the generation of income.

Income statements prepared under IFRS contain which of the following sections or categories, depending on the nature of a firm's earnings for the period?

Assume that a firm uses the accrual basis of accounting.Indicate the amount of expense the firm recognizes during the month of November for each independent transaction. a. Rent of $3,600 is paid on November 1 for the months November through January. b. Inventory costing $2,500 is ordered on account. The invoice is received on November 25 and the goods are received on December 5. c. Insurance premium of $900 is paid for a full year of coverage starting November 1. d. On December 3, an invoice for November utilities of $325 is received. e. On November 1, supplies costing $2,200 are purchased. At November 30, $500 of supplies remained on hand.

Shareholders of Forest Glen Corporation have received $35,000 in dividends in the current year.At year end the corporation has total assets of $500,000, total liabilities equal to $300,000, and contributed capital totaling $100,000.If retained earnings at the beginning of the year was $80,000, what was Forest Glen's net income for the current year?

Both U.S.GAAP and IFRS require the presentation of an income statement and the presentation of the items of Other Comprehensive Income.U.S.GAAP permits the following reporting format(s) except for:

Revenue and expense accounts

The income statement provides information for assessing the operating profitability of a firm.One tool used for analysis is the common-size income statement that expresses

Income from continuing operations includes

The sum of net income and other comprehensive income is/are:

U.S.GAAP and IFRS require separate income statement display of income from continuing operations and _____earnings that will not continue because the firm either sold, or made a decision to sell, a portion of its business).Such a requirement aids users of the income statement in predicting future earnings.

What is comprehensive income?

Recognition of revenue usually occurs when

All transactions that increase net assets affect income.

Which of the following is/are not examples of a period expense?

The matching convention assigns _____ to the related _____.

U.S.GAAP and IFRS require firms to disclose unrealized gains and losses that historically have bypassed the income statement in a category called _____.

A firms decision to sell its headquarters building at a gain

Income statements contain which of the following sections or categories, depending on the nature of a firm's earnings for the period?