Question 1

Key performance measures on the statement of net income include gross profit and net assets,among others.

Accepted Answer

A) True 
 B)False

Question 2

IFRS requires companies to present specific items on the income statement including write-downs of inventories and litigation settlements.

Accepted Answer

A) True 
 B)False

Question 3

Bandana Company had the following balances for net income and pretax gains and losses on December 31:  The company's effective tax rate is 40%.What amount should Bandana Company report as comprehensive income for the year ended December 31?

Accepted Answer

A) $27,600 
B) $44,400 
C) $50,000 
D) $53,600

Question 4

Why do companies issue condensed income statements?

Accepted Answer

The answer of Why do companies issue condensed income statements?...

Question 5

The four income statement elements are gains,losses,revenues,and expenses.

Accepted Answer

A) True 
 B)False

Question 6

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

Question 7

Which of the following income statement items is considered to be transitory?

Accepted Answer

A) promotional costs for a new product 
B) sales revenue from the general public 
C) interest expense on short-term loans 
D) income from discontinued operations

Question 8

The "cookie jar reserves" earnings management technique involves increasing earnings so as to increase managers' compensation.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not an account type reported in the statement of stockholders' equity?

Accepted Answer

A) comprehensive income 
B) noncontrolling interest 
C) treasury stock 
D) contributed capital

Question 10

Which of the following is not a characteristic that must be considered when determining that a business activity is a component of an entity for purposes of classifying that activity as a discontinued operation?

Accepted Answer

A) The activity comprises operations and cash flows. 
B) The activity constitutes a strategic advantage. 
C) The activity can be clearly distinguished for financial reporting purposes. 
D) The activity is a portion of the entity.

Question 11

What is the amount of gross profit for Cambridge Company?

Accepted Answer

A) $9,369 
B) $5,731 
C) $5,494 
D) $5,108

Question 12

Other comprehensive income includes gains and losses from all foreign currency translations.

Accepted Answer

A) True 
 B)False

Question 13

If a company writes down the net assets of a discontinued operation from original carrying value to a remeasurement of fair value in one year,then in the next year the fair value changes ________.

Accepted Answer

A) the company will recognize any subsequent loss or gain for the difference between new fair value and prior year remeasured fair value 
B) the company will recognize any subsequent loss but limited gains up to the original carrying value before remeasurement 
C) the company will recognize any subsequent loss but no gains for the difference between new fair value and prior year remeasured fair value 
D) the company cannot recognize any subsequent loss or gain

Question 14

IFRS and U.S.GAAP include the same four items in Other Comprehensive Income.

Accepted Answer

A) True 
 B)False

Question 15

What is the amount of income from continuing operations for Tuche Millinery?

Accepted Answer

A) $247 
B) $302 
C) $194 
D) $145

Question 16

Comprehensive income may be reported in the financial statements in either of two formats.

Accepted Answer

A) True 
 B)False

Question 17

List the five component accounts included in stockholders' equity.

Accepted Answer

The answer of List the five component accounts included in...

Question 18

The single-step income statement format combines all revenues and expenses into a single category and all gains and losses into another single category.

Accepted Answer

A) True 
 B)False

Question 19

Earnings per share is presented for continuing operations,discontinued operations,and net income.

Accepted Answer

A) True 
 B)False

Question 20

Truko,Inc.provided the following partial-trial balance for the current year.Prepare a multi-step income statement for the year ended December 31.Truko is subject to a 40% income tax rate.

Accepted Answer

The answer of Truko,Inc.provided the following partial-trial balance for the...

Exam 5: Statements of Net Income and Comprehensive Net Income

Key performance measures on the statement of net income include gross profit and net assets,among others.

IFRS requires companies to present specific items on the income statement including write-downs of inventories and litigation settlements.

Bandana Company had the following balances for net income and pretax gains and losses on December 31: The company's effective tax rate is 40%.What amount should Bandana Company report as comprehensive income for the year ended December 31?

Why do companies issue condensed income statements?

The four income statement elements are gains,losses,revenues,and expenses.

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

Which of the following income statement items is considered to be transitory?

The "cookie jar reserves" earnings management technique involves increasing earnings so as to increase managers' compensation.

Which of the following is not an account type reported in the statement of stockholders' equity?

Which of the following is not a characteristic that must be considered when determining that a business activity is a component of an entity for purposes of classifying that activity as a discontinued operation?

What is the amount of gross profit for Cambridge Company?

Other comprehensive income includes gains and losses from all foreign currency translations.

If a company writes down the net assets of a discontinued operation from original carrying value to a remeasurement of fair value in one year,then in the next year the fair value changes ________.

IFRS and U.S.GAAP include the same four items in Other Comprehensive Income.

What is the amount of income from continuing operations for Tuche Millinery?

Comprehensive income may be reported in the financial statements in either of two formats.

List the five component accounts included in stockholders' equity.

The single-step income statement format combines all revenues and expenses into a single category and all gains and losses into another single category.

Earnings per share is presented for continuing operations,discontinued operations,and net income.

Truko,Inc.provided the following partial-trial balance for the current year.Prepare a multi-step income statement for the year ended December 31.Truko is subject to a 40% income tax rate.