Exam 5: Income Statement: Reporting Results of Operating Activities

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:

U.S.GAAP and IFRS require firms in some instances to change the carrying value of certain assets and liabilities.Both sets of accounting standards preclude the recognition of these changes in net income, and therefore in retained earnings.

Revenues measure the inflow of net assets from operating activities.

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

What are common-size income statements?

Under the accrual method, the timing of revenue recognition is influenced by when the services or product are provided.

What is revenue recognition?

Comprehensive income equals net income as reported on the income statement plus (minus) the increase (decrease) in other comprehensive income for the year.

Which financial statement reports operating performance for a specific period of time?

The income statement typically provides information about the operating results of business segments.

As a general principle, under the accrual basis of accounting, the firm recognizes revenue when the transaction meets which of the following conditions?

_____ present an ordered list, grouped by broad categories of revenues and expenses.They begin with revenues followed by a list of expenses.

Which of the following elements of financial statements is not a component of comprehensive income?

How are expenses recognized and measured?

Other comprehensive income for a reporting period include(s)

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

Both U.S.GAAP and IFRS require firms to report the cumulative effect of other comprehensive income in a balance sheet account called Accumulated

Expenditures on advertising and research must be recognized as expense in the period of expenditure, regardless of the firm's expectation of future benefits.

Which of the following concepts best characterizes the accrual basis of accounting?

The income statement, also called the statement of financial position, provides information, at a point in time, on the firm's productive resources and the financing used to pay for those resources.