Question 1

The cumulative effect of changing accounting principles is only reported for the year of the change.

Accepted Answer

A) True 
 B)False

Question 2

Changes in accounting estimates are

Accepted Answer

A) Considered to be accounting errors 
B) Reported by retrospective restatement of financial statements 
C) Accounted for with a cumulative "catch-up" adjustment 
D) Considered to be a change in accounting policy 
E) Accounted for in the period of the change and future periods 
A) Considered to be accounting errors 
B) Reported by retrospective restatement of financial statements 
C) Accounted for with a cumulative "catch-up" adjustment 
D) Considered to be a change in accounting policy 
E) Accounted for in the period of the change and future periods

Question 3

The statement of comprehensive income is a detailed statement of net income plus or minus any other comprehensive income items.

Accepted Answer

A) True 
 B)False

Question 4

Retained earnings are part of the shareholders' claim on the company's net assets.

Accepted Answer

A) True 
 B)False

Question 5

North American Construction Corp.has three lines of business including surveying,excavating and planning.These product lines are considered to be

Accepted Answer

A) Other comprehensive income 
B) Discontinued operations 
C) Operating segments 
D) Contributed capital 
E) All of these 
A) Other comprehensive income 
B) Discontinued operations 
C) Operating segments 
D) Contributed capital 
E) All of these

Question 6

A correction of errors in prior year financial statements require an adjustment to opening retained earnings.

Accepted Answer

A) True 
 B)False

Question 7

When a corporation calls in its outstanding shares and issues more than one new share in exchange for each old share,this is a:

Accepted Answer

A) Share split. 
B) Share dividend. 
C) Cash dividend. 
D) Reverse share split. 
E) Liquidating dividend 
A) Share split. 
B) Share dividend. 
C) Cash dividend. 
D) Reverse share split. 
E) Liquidating dividend

Question 8

Restricted retained earnings must be disclosed on the balance sheet or the statement of changes in equity,or in the notes to the financial statements.

Accepted Answer

A) True 
 B)False

Question 9

Companies use share dividends

Accepted Answer

A) To keep the market price of the shares affordable 
B) To increase the market value of shares 
C) To increase contributed capital 
D) To raise capital for the company for future expansion 
E) All of these 
A) To keep the market price of the shares affordable 
B) To increase the market value of shares 
C) To increase contributed capital 
D) To raise capital for the company for future expansion 
E) All of these

Question 10

The following information was taken from the ledger and other records of Lillie Inc.at December 31,2021.All amounts are pre-tax.
   Additional Information: There was no change in number of preferred shares during the year.Preferred share cash dividends were in arrears for 2020.There were 140,000 common shares outstanding on January 1,2021.24,000 shares were issued on April 1,2021 and another 16,000 shares were issued on Oct.1,2021.Required: Prepare an Income Statement in good form for Lillie Inc.for the fiscal year ended December 31,2021.Use an income tax rate of 40%.Include full earnings per share disclosure and show all calculations.

Accepted Answer

The answer of The following information was taken from the...

Question 11

A company can change from one acceptable accounting principle to another as long as the change improves the usefulness of information in its financial statements or it is required by IFRS.

Accepted Answer

A) True 
 B)False

Question 12

A share dividend increases the number of previously outstanding shares.

Accepted Answer

A) True 
 B)False

Question 13

Coquitlam Crunch Corporation has 60,000 common shares outstanding.The following transactions related to the company's shares took place during the year:
   Prepare the journal entries to record the transactions.

Accepted Answer

The answer of Coquitlam Crunch Corporation has 60,000 common shares...

Question 14

Reporting for discontinued operations includes:

Accepted Answer

A) Income or loss from operating the discontinued segment (net of tax 
B) Gain or loss from disposal of the segment's net assets (net of tax) 
C) Income or loss from operating the discontinued operations (net of tax)and gain or loss from disposal of the operation's net assets (net of tax) 
D) Tax benefits of the discontinued segment 
E) All of these 
A) Income or loss from operating the discontinued segment (net of tax 
B) Gain or loss from disposal of the segment's net assets (net of tax) 
C) Income or loss from operating the discontinued operations (net of tax)and gain or loss from disposal of the operation's net assets (net of tax) 
D) Tax benefits of the discontinued segment 
E) All of these

Question 15

A share dividend is not a liability on the balance sheet because it does not require a distribution of assets.

Accepted Answer

A) True 
 B)False

Question 16

A share dividend is a distribution of corporate assets as a dividend that returns part of the original investment to shareholders.

Accepted Answer

A) True 
 B)False

Question 17

Restrictions on retained earnings can be

Accepted Answer

A) Limits that identify how much of the retained earnings balance is not available for dividends or the repurchase of shares 
B) Statutory limits set by government 
C) Due to loan agreements 
D) Set by a corporation's directors in order to limit dividends and maintain cash 
E) All of these answers 
A) Limits that identify how much of the retained earnings balance is not available for dividends or the repurchase of shares 
B) Statutory limits set by government 
C) Due to loan agreements 
D) Set by a corporation's directors in order to limit dividends and maintain cash 
E) All of these answers

Question 18

Brook Link Inc.had the following equity as of December 31,Year 1:
 $\begin{array}{|l|l|}
\hline \begin{array}{l}
\text { Common shares, } 500,000 \text { shares } \
\text { authorized, } 100,000 \text { shares issued }
\end{array} & \$ 1,200,000 \
\hline \text { Retained earnings } & 1,300,000 \
\hline
\end{array}$ The following transactions related to the company's shares took place during Year 2:
 $\begin{array}{|l|l|}
\hline \text { Aug. } 1 & \begin{array}{l}
\text { Purchased and retired } 6,000 \text { shares at } \$ 13 \text { per share. There was no balance in } \
\text { Contributed Capital from the retirement of common shares. }
\end{array} \
\hline \text { Dec. } 3 & \text { Purchased and retired } 5,000 \text { shares at } \$ 11 \text { per share } \
\hline
\end{array}$ Prepare the journal entries to record the Year 2 transactions.

Accepted Answer

The answer of Brook Link Inc.had the following equity as...

Question 19

The financial statement impact for a company that desires to make a change in accounting policy include(s)

Accepted Answer

A) Retrospective restatement of prior period financial statements 
B) Financial impact charged or credited (net of tax)to the opening balance of retained earnings 
C) The nature and justification for the change 
D) The effect of the change on current year net income 
E) All of these 
A) Retrospective restatement of prior period financial statements 
B) Financial impact charged or credited (net of tax)to the opening balance of retained earnings 
C) The nature and justification for the change 
D) The effect of the change on current year net income 
E) All of these

Question 20

A share dividend

Accepted Answer

A) Is a distribution of additional shares to its shareholders without receiving any payment 
B) Transfers a portion of equity from retained earnings to contributed capital 
C) Is often referred to as a stock dividend 
D) Does not reduce a corporation's assets and equity 
E) All of these 
A) Is a distribution of additional shares to its shareholders without receiving any payment 
B) Transfers a portion of equity from retained earnings to contributed capital 
C) Is often referred to as a stock dividend 
D) Does not reduce a corporation's assets and equity 
E) All of these

The cumulative effect of changing accounting principles is only reported for the year of the change.

Changes in accounting estimates are

The statement of comprehensive income is a detailed statement of net income plus or minus any other comprehensive income items.

Retained earnings are part of the shareholders' claim on the company's net assets.

North American Construction Corp.has three lines of business including surveying,excavating and planning.These product lines are considered to be

A correction of errors in prior year financial statements require an adjustment to opening retained earnings.

When a corporation calls in its outstanding shares and issues more than one new share in exchange for each old share,this is a:

Restricted retained earnings must be disclosed on the balance sheet or the statement of changes in equity,or in the notes to the financial statements.

Companies use share dividends

A company can change from one acceptable accounting principle to another as long as the change improves the usefulness of information in its financial statements or it is required by IFRS.

A share dividend increases the number of previously outstanding shares.

Coquitlam Crunch Corporation has 60,000 common shares outstanding.The following transactions related to the company's shares took place during the year: Prepare the journal entries to record the transactions.

Reporting for discontinued operations includes:

A share dividend is not a liability on the balance sheet because it does not require a distribution of assets.

A share dividend is a distribution of corporate assets as a dividend that returns part of the original investment to shareholders.

Restrictions on retained earnings can be

The financial statement impact for a company that desires to make a change in accounting policy include(s)

A share dividend

Property, plant and Equipment Intangibles

Current Liabilities

Partnerships

Organization and Operation of Corporations

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Filters

Exam 5: Corporate Reporting: Income, earnings Per Share, and Retained Earnings

The cumulative effect of changing accounting principles is only reported for the year of the change.

Changes in accounting estimates are

The statement of comprehensive income is a detailed statement of net income plus or minus any other comprehensive income items.

Retained earnings are part of the shareholders' claim on the company's net assets.

North American Construction Corp.has three lines of business including surveying,excavating and planning.These product lines are considered to be

A correction of errors in prior year financial statements require an adjustment to opening retained earnings.

When a corporation calls in its outstanding shares and issues more than one new share in exchange for each old share,this is a:

Restricted retained earnings must be disclosed on the balance sheet or the statement of changes in equity,or in the notes to the financial statements.

Companies use share dividends

A company can change from one acceptable accounting principle to another as long as the change improves the usefulness of information in its financial statements or it is required by IFRS.

A share dividend increases the number of previously outstanding shares.

Coquitlam Crunch Corporation has 60,000 common shares outstanding.The following transactions related to the company's shares took place during the year: Prepare the journal entries to record the transactions.

Reporting for discontinued operations includes:

A share dividend is not a liability on the balance sheet because it does not require a distribution of assets.

A share dividend is a distribution of corporate assets as a dividend that returns part of the original investment to shareholders.

Restrictions on retained earnings can be

The financial statement impact for a company that desires to make a change in accounting policy include(s)

A share dividend

Property, plant and Equipment Intangibles

Current Liabilities

Partnerships

Organization and Operation of Corporations

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Filters