Question 1

Advertising expense would be an administrative expense.

Accepted Answer

A) True 
 B)False

Question 2

The term primary analysis is used to describe consistent and conservative analysis.

Accepted Answer

A) True 
 B)False

Question 3

Changes in account balances of Multi-Plus Inc.during 2010 were:   Assuming that there were no charges to retained earnings other than dividends of $62,000, the net income for 2010 was:

Accepted Answer

A)  ($7,000) 
B)  $55,000 
C)  $117,000 
D)  $257,000 
E)  none of the answers are correct 
A)  ($7,000) 
B)  $55,000 
C)  $117,000 
D)  $257,000 
E)  none of the answers are correct

Question 4

Andromeda Industries had 300,000 shares of common stock with a $3 par value and retained earnings of $180,000.In 2010, earnings per share were $1.80.In 2009, the stock was split 3 for 1.Which of the following would not result from the stock split?

Accepted Answer

A)  The new shares would total 900,000. 
B)  The total amount in the capital stock account would remain the same. 
C)  The par value would become $1. 
D)  Retained earnings would be reduced. 
E)  The earnings per share for 2006 would be restated at $0.60. 
A)  The new shares would total 900,000. 
B)  The total amount in the capital stock account would remain the same. 
C)  The par value would become $1. 
D)  Retained earnings would be reduced. 
E)  The earnings per share for 2006 would be restated at $0.60.

Question 5

Since the number of shares changes under both a stock dividend and a stock split, any ratio based on the number of shares must be restated.

Accepted Answer

A) True 
 B)False

Question 6

For the income statement under IFRS, there is a required format.

Accepted Answer

A) True 
 B)False

Question 7

In analysis of income, for purposes of determining a trend, extraordinary items should be included.

Accepted Answer

A) True 
 B)False

Question 8

Equity earnings (losses) are the proportionate share of the earnings (losses) of the investee.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not true about a stock dividend?

Accepted Answer

A)  With a stock dividend, the firm issues a percentage of outstanding stock as new shares to existing shareholders. 
B)  The overall effect of a stock dividend is to leave total stockholders' equity and each owner's share of stockholders' equity unchanged. 
C)  In theory, with a stock dividend, total market value considering all outstanding shares should not change. 
D)  Since the number of shares changes under a stock dividend, any ratio based on the number of shares must be restated. 
E)  The accounting for a stock dividend, assuming the distribution is relatively small, requires that the par value of the stock be removed from retained earnings. 
A)  With a stock dividend, the firm issues a percentage of outstanding stock as new shares to existing shareholders. 
B)  The overall effect of a stock dividend is to leave total stockholders' equity and each owner's share of stockholders' equity unchanged. 
C)  In theory, with a stock dividend, total market value considering all outstanding shares should not change. 
D)  Since the number of shares changes under a stock dividend, any ratio based on the number of shares must be restated. 
E)  The accounting for a stock dividend, assuming the distribution is relatively small, requires that the par value of the stock be removed from retained earnings.

Question 10

Anchor Company has 1,000,000 shares of common stock with a par value of $5.Additional paid-in capital totals $5,000,000 and retained earnings is $8,000,000.The directors declare a 10% stock dividend when the market value is $15.The reduction of retained earnings as a result of the declaration will be:

Accepted Answer

A)  $0 
B)  $500,000 
C)  $800,000 
D)  $1,000,000 
E)  $1,500,000 
A)  $0 
B)  $500,000 
C)  $800,000 
D)  $1,000,000 
E)  $1,500,000

Question 11

IFRS allows for alternative performance measures to be presented in the income statement that are not allowed by U.S.GAAP.

Accepted Answer

A) True 
 B)False

Question 12

Fisher Company has 1,000,000 share of common stock with a par value of $10.Additional paid-in capital totals $10,000,000 and retained earnings is $12,000,000.The directors declare a 6% stock dividend when the market value is $5.The reduction of retained earnings as a result of the declaration will be:

Accepted Answer

A)  $0 
B)  $300,000 
C)  $600,000 
D)  $500,000 
E)  none of the answers are correct 
A)  $0 
B)  $300,000 
C)  $600,000 
D)  $500,000 
E)  none of the answers are correct

Question 13

Which of the following will not affect retained earnings?

Accepted Answer

A)  declaration of a stock dividend 
B)  payment of a cash dividend previously disclosed 
C)  adjustment for an error of a prior period 
D)  net income 
E)  net loss 
A)  declaration of a stock dividend 
B)  payment of a cash dividend previously disclosed 
C)  adjustment for an error of a prior period 
D)  net income 
E)  net loss

Question 14

The accounting standard provides considerable flexibility in reporting comprehensive income.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following items on the income statement is not disclosed net of tax?

Accepted Answer

A)  unusual or infrequent item disclosed separately 
B)  discontinued operations 
C)  extraordinary loss 
D)  cumulative effect of change in accounting principle 
E)  unusual or infrequent item disclosed separately and discontinued operations are both not disclosed net of tax 
A)  unusual or infrequent item disclosed separately 
B)  discontinued operations 
C)  extraordinary loss 
D)  cumulative effect of change in accounting principle 
E)  unusual or infrequent item disclosed separately and discontinued operations are both not disclosed net of tax

Question 16

Gross profit will be a prominent figure on a single-step income statement.

Accepted Answer

A) True 
 B)False

Question 17

Extraordinary items are always presented gross of applicable income taxes.

Accepted Answer

A) True 
 B)False

Question 18

Earnings per share is the earnings per share of outstanding common stock.

Accepted Answer

A) True 
 B)False

Question 19

A stock split merely increases the number of shares of stock; it usually does not change retained earnings or paid-in capital.

Accepted Answer

A) True 
 B)False

Question 20

Noncontrolling interest relects income from ownership of noncontrolling shareholders in the equity of consolidated subsidaries less than wholly owned.

Accepted Answer

A) True 
 B)False

Advertising expense would be an administrative expense.

The term primary analysis is used to describe consistent and conservative analysis.

Changes in account balances of Multi-Plus Inc.during 2010 were: Assuming that there were no charges to retained earnings other than dividends of $62,000, the net income for 2010 was:

Andromeda Industries had 300,000 shares of common stock with a $3 par value and retained earnings of $180,000.In 2010, earnings per share were $1.80.In 2009, the stock was split 3 for 1.Which of the following would not result from the stock split?

Since the number of shares changes under both a stock dividend and a stock split, any ratio based on the number of shares must be restated.

For the income statement under IFRS, there is a required format.

In analysis of income, for purposes of determining a trend, extraordinary items should be included.

Equity earnings (losses) are the proportionate share of the earnings (losses) of the investee.

Which of the following is not true about a stock dividend?

IFRS allows for alternative performance measures to be presented in the income statement that are not allowed by U.S.GAAP.

Which of the following will not affect retained earnings?

The accounting standard provides considerable flexibility in reporting comprehensive income.

Which of the following items on the income statement is not disclosed net of tax?

Gross profit will be a prominent figure on a single-step income statement.

Extraordinary items are always presented gross of applicable income taxes.

Earnings per share is the earnings per share of outstanding common stock.

A stock split merely increases the number of shares of stock; it usually does not change retained earnings or paid-in capital.

Noncontrolling interest relects income from ownership of noncontrolling shareholders in the equity of consolidated subsidaries less than wholly owned.

Introduction to Financial Reporting

Introduction to Financial Statements and Other Financial Reporting Topics

Balance Sheet

Basics of Analysis

Liquidity of Short-Term Assets; Related Debt-Paying Ability

Long-Term Debt-Paying Ability

Profitability

For the Investor

Statement of Cash Flows

Expanded Analysis

Special Industries: Banks, Utilities, Oil and Gas, Transportation, Insurance, Real Estate Companies

Personal Financial Statements and Accounting for Governments and Not-For-Profit Organizations

Filters

Exam 4: Income Statement

Advertising expense would be an administrative expense.

The term primary analysis is used to describe consistent and conservative analysis.

Changes in account balances of Multi-Plus Inc.during 2010 were: Assuming that there were no charges to retained earnings other than dividends of $62,000, the net income for 2010 was:

Andromeda Industries had 300,000 shares of common stock with a $3 par value and retained earnings of $180,000.In 2010, earnings per share were $1.80.In 2009, the stock was split 3 for 1.Which of the following would not result from the stock split?

Since the number of shares changes under both a stock dividend and a stock split, any ratio based on the number of shares must be restated.

For the income statement under IFRS, there is a required format.

In analysis of income, for purposes of determining a trend, extraordinary items should be included.

Equity earnings (losses) are the proportionate share of the earnings (losses) of the investee.

Which of the following is not true about a stock dividend?

IFRS allows for alternative performance measures to be presented in the income statement that are not allowed by U.S.GAAP.

Which of the following will not affect retained earnings?

The accounting standard provides considerable flexibility in reporting comprehensive income.

Which of the following items on the income statement is not disclosed net of tax?

Gross profit will be a prominent figure on a single-step income statement.

Extraordinary items are always presented gross of applicable income taxes.

Earnings per share is the earnings per share of outstanding common stock.

A stock split merely increases the number of shares of stock; it usually does not change retained earnings or paid-in capital.

Noncontrolling interest relects income from ownership of noncontrolling shareholders in the equity of consolidated subsidaries less than wholly owned.

Introduction to Financial Reporting

Introduction to Financial Statements and Other Financial Reporting Topics

Balance Sheet

Basics of Analysis

Liquidity of Short-Term Assets; Related Debt-Paying Ability

Long-Term Debt-Paying Ability

Profitability

For the Investor

Statement of Cash Flows

Expanded Analysis

Special Industries: Banks, Utilities, Oil and Gas, Transportation, Insurance, Real Estate Companies

Personal Financial Statements and Accounting for Governments and Not-For-Profit Organizations

Filters