Chat with AIExam 6: Financial Statement I: the Income Statement
When a component of a business has been discontinued during the year,this component's operating losses of the current period up to the measurement date should be included in the
(43) 
VerifiedA
Discuss the economic consequences of financial reporting.
(42) VerifiedIncome measurement and financial reporting involve economic consequences,including:
-Financial information can affect the distribution of wealth among investors.More informed investors,or investors employing security analysts,may be able to increase their wealth at the expense of less informed investors.
-Financial information can affect the level of risk accepted by a firm.As discussed in Chapter 4,focusing on short-term,less risky projects may have long-term detrimental effects.
-Financial information can affect the rate of capital formation in the economy and result in a reallocation of wealth between consumption and investment within the economy.
-Financial information can affect how investment is allocated among firms. Since economic consequences may affect different users of information differently,the selection of financial reporting methods by the FASB and the SEC involves trade-offs.The deliberations of accounting standard setters should consider these economic consequences.
Which of the following is not an example of an error?
(45) VerifiedC
A transaction that is material in amount,unusual in nature,but not infrequent in occurrence should be presented separately as a an)
(32) A company changed its method of inventory pricing from last-in,first-out to first-in,first-out during the current year.Generally accepting accounting principles require that this change in accounting method be reported by:
(37) An example of the correction of an error in previously issued financial statements is a change
(31) Which of the following is an example of an extraordinary item in reporting results of operations?
(35) A prior period adjustment should be reflected,net of applicable income taxes,in the financial statements of a business entity in the
(35) Define and discuss the accounting treatment for discontinued operations.
(33) An extraordinary item should be reported separately as a component of income
(33) Define comprehensive income.What is the purpose of reporting comprehensive income?
(35) The phrase events and transactions that are distinguished by both their unusual nature and their infrequency of occurrence describes:
(32) A loss from the disposal of a component of a business enterprise should be reported separately as a component of income
(34) Discuss the all inclusive vs.current operating performance views of income.
(35) The accounts receivable turnover and inventory turnover ratios are used to analyze
(28) 
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