Question 1

Realization of revenue occurs when

Accepted Answer

A)  the item is formally recorded and reported in the financial statements 
B)  noncash resources are converted into cash or rights to cash 
C)  the actual exchange of noncash resources into cash 
D)  when a transaction is both realized and realizable 
A)  the item is formally recorded and reported in the financial statements 
B)  noncash resources are converted into cash or rights to cash 
C)  the actual exchange of noncash resources into cash 
D)  when a transaction is both realized and realizable

Question 2

The information for Roberts Company is presented below:   Required:
Compute the following (ignore income taxes): 
a.	Sales
b.	Beginning inventory
c.	General and administrative expenses

Accepted Answer

a.	$58,750

Question 3

When is a company not required to report comprehensive income?

Accepted Answer

A)  when it has a net operating loss 
B)  when it has no other comprehensive income items 
C)  when it has no extraordinary items 
D)  when it has no prior period adjustments 
A)  when it has a net operating loss 
B)  when it has no other comprehensive income items 
C)  when it has no extraordinary items 
D)  when it has no prior period adjustments

Question 4

A review of the December 31, 2014, financial statements of Run Corporation revealed that under the caption "extraordinary losses," Run reported a total of $300,000. Further analysis revealed that the $300,000 in losses comprised the following items: 
1.Run recorded a gain of $80,000 incurred in the sale of equipment.
2.In an unusual and infrequent occurrence, a loss of $350,000 was sustained as a result of tornado damage to a manufacturing facility.
3.During 2014, several factories were shut down during a major strike by employees of Run's major customer. Shutdown expenses totaled $150,000.
4.Inventory in the amount of $30,000 was written off as obsolete.

Ignoring income taxes, what amount of loss should Run have reported as an extraordinary loss on its 2014 income statement?

Accepted Answer

A)  $150,000 
B)  $350,000 
C)  $280,000 
D)  $500,000 
A)  $150,000 
B)  $350,000 
C)  $280,000 
D)  $500,000

Question 5

What are the seven major components of a company's income statement?

Accepted Answer

1) Revenues
2) Operating incom

Question 6

Companies with lower coverage ratios have a greater risk and a lower financial flexibility.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not used as a caption if there is nothing to report?

Accepted Answer

A)  income from continuing operations 
B)  extraordinary items 
C)  interest expense 
D)  income taxes 
A)  income from continuing operations 
B)  extraordinary items 
C)  interest expense 
D)  income taxes

Question 8

The following are accounting items taken from the records of Paul Company for 2013: 
 
Required:
Prepare the net cash flow from operating activities section of Paul Company's 2013 statement of cash flows using the indirect method.

Accepted Answer

The answer of The following are accounting items taken from...

Question 9

Which of the following material gains/losses would be disclosed as an extraordinary item on an entity's income statement?

Accepted Answer

A)  a loss arising from the write-off of a large uncollectible accounts receivable balance 
B)  a loss arising from the expropriation of a manufacturing plant by a foreign government 
C)  a gain from the sale of a component of the entity's business 
D)  a gain from the sale of manufacturing equipment no longer needed by the entity 
A)  a loss arising from the write-off of a large uncollectible accounts receivable balance 
B)  a loss arising from the expropriation of a manufacturing plant by a foreign government 
C)  a gain from the sale of a component of the entity's business 
D)  a gain from the sale of manufacturing equipment no longer needed by the entity

Question 10

Bradley's Inc.'s adjusted trial balance contains the following account balances at December 31, 2014:   Income taxes are 30% on all items, and there were 2,000 shares of common stock outstanding during the year.
Required:
Prepare a statement of comprehensive income.

Accepted Answer

The answer of Bradley's Inc.'s adjusted trial balance contains the...

Question 11

On December 31, 2014, the net assets of Martinez Manufacturing amounted to $40,000. Net income calculated by using the financial capital maintenance concept amounted to $12,000. During the year, additional common stock was issued for $8,000, and $5,000 of dividends was paid. The net assets at January 1, 2014, amounted to

Accepted Answer

A)  $31,000 
B)  $37,000 
C)  $20,000 
D)  $25,000 
A)  $31,000 
B)  $37,000 
C)  $20,000 
D)  $25,000

Question 12

U.S. GAAP and IFRS companies commonly measure and report net income and comprehensive income.

Accepted Answer

A) True 
 B)False

Question 13

If a company does not have any discontinued operations or extraordinary items to list on its income statement, the labels should still be there with a zero balance noted.

Accepted Answer

A) True 
 B)False

Question 14

In 2014, Dallas Company had sales of $600,000; cost of sales of $430,000; interest expense of $12,000; a gain on the sale of a component of $52,000; and an extraordinary loss of $25,000. For its income statement, Dallas uses the single-step format and the all-inclusive concept. What was Dallas's reported pretax income from continuing operations?

Accepted Answer

A)  $150,000 
B)  $170,000 
C)  $158,000 
D)  $118,000 
A)  $150,000 
B)  $170,000 
C)  $158,000 
D)  $118,000

Question 15

The SEC scrutinizes reported earnings numbers to assess the quality of earnings and to detect any potential for earnings management.

Accepted Answer

A) True 
 B)False

Question 16

Exhibit 5-1 The following condensed income statement of Ranger Corporation is presented for the two years ended December 31, 2014 and 2013:

On January 1, 2014, Ranger entered into an agreement to sell one of its separate operating divisions for $2,000,000. The sale resulted in a gain on disposition of $900,000 on November 12, 2014, and qualifies as a discontinued component. This division's contribution to Ranger's reported income before income taxes for each year was as follows: 
  
Assume an income tax rate of 30%.

-
Refer to Exhibit 5-1. In the preparation of a revised comparative income statement, Ranger should report under the caption "Discontinued Operations" for 2014 and 2013, respectively,

Accepted Answer

A)  income of $140,000 and a loss of $280,000 
B)  income of $140,000 and a loss of $0 
C)  income of $200,000 and a loss of $400,000 
D)  a loss of $700,000 and a loss of $400,000 
A)  income of $140,000 and a loss of $280,000 
B)  income of $140,000 and a loss of $0 
C)  income of $200,000 and a loss of $400,000 
D)  a loss of $700,000 and a loss of $400,000

Question 17

Together with the cash flow statement, the income statement enables the investors to determine the rate of return the company is generating relative to the amount of capital invested.

Accepted Answer

A) True 
 B)False

Question 18

Tiger Corporation presents the following condensed comparative income statement for
2013, 2014, and 2015:   
Required:
Prepare the rate of change analysis for Tiger 2014 and 2015.

Accepted Answer

The answer of Tiger Corporation presents the following condensed comparative...

Question 19

List five purposes of the income statement.

Accepted Answer

1) Evaluate the profitability and assess

Question 20

Georgio Company began 2014 with net assets of $80,000. Net income calculated by using the capital maintenance concept was $21,000. During 2014 owners contributed $26,000 of new capital. By year-end, the net assets totaled $78,000. Dividends to the owners during 2014 were

Accepted Answer

A)  $49,000 
B)  $28,000 
C)  $23,000 
D)  $2,000 
A)  $49,000 
B)  $28,000 
C)  $23,000 
D)  $2,000

Realization of revenue occurs when

The information for Roberts Company is presented below: Required: Compute the following (ignore income taxes): a. Sales b. Beginning inventory c. General and administrative expenses

When is a company not required to report comprehensive income?

What are the seven major components of a company's income statement?

Companies with lower coverage ratios have a greater risk and a lower financial flexibility.

Which of the following is not used as a caption if there is nothing to report?

The following are accounting items taken from the records of Paul Company for 2013: Required: Prepare the net cash flow from operating activities section of Paul Company's 2013 statement of cash flows using the indirect method.

Which of the following material gains/losses would be disclosed as an extraordinary item on an entity's income statement?

Bradley's Inc.'s adjusted trial balance contains the following account balances at December 31, 2014: Income taxes are 30% on all items, and there were 2,000 shares of common stock outstanding during the year. Required: Prepare a statement of comprehensive income.

U.S. GAAP and IFRS companies commonly measure and report net income and comprehensive income.

If a company does not have any discontinued operations or extraordinary items to list on its income statement, the labels should still be there with a zero balance noted.

The SEC scrutinizes reported earnings numbers to assess the quality of earnings and to detect any potential for earnings management.

Together with the cash flow statement, the income statement enables the investors to determine the rate of return the company is generating relative to the amount of capital invested.

Tiger Corporation presents the following condensed comparative income statement for 2013, 2014, and 2015: Required: Prepare the rate of change analysis for Tiger 2014 and 2015.

List five purposes of the income statement.

Georgio Company began 2014 with net assets of $80,000. Net income calculated by using the capital maintenance concept was $21,000. During 2014 owners contributed $26,000 of new capital. By year-end, the net assets totaled $78,000. Dividends to the owners during 2014 were

The Demand for and Supply of Financial Accounting Information

Financial Reporting: Its Conceptual Framework

Review of a Companys Accounting System

The Balance Sheet and the Statement of Shareholders Equity

Cash and Receivables

Inventories: Cost Measurement and Flow Assumptions

Inventories: Special Valuation Issues

Current Liabilities and Contingencies

Property, Plant, and Equipment: Acquisition and Subsequent Investments

Depreciation, Depletion, Impairment, and Disposal

Intangibles

Investments and Long-Term Receivables

Financing Liabilities: Bonds and Notes Payable

Contributed Capital

Retained Earnings and Earnings Per Share

Advanced Issues in Revenue Recognition

Accounting for Income Taxes

Accounting for Postretirement Benefits

Accounting for Leases

The Statement of Cash Flows

Accounting for Changes and Errors

Time Value of Money Module

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Exam 5: The Income Statement and the Statement of Cash Flows

Realization of revenue occurs when

The information for Roberts Company is presented below: Required: Compute the following (ignore income taxes): a. Sales b. Beginning inventory c. General and administrative expenses

When is a company not required to report comprehensive income?

What are the seven major components of a company's income statement?

Companies with lower coverage ratios have a greater risk and a lower financial flexibility.

Which of the following is not used as a caption if there is nothing to report?

The following are accounting items taken from the records of Paul Company for 2013: Required: Prepare the net cash flow from operating activities section of Paul Company's 2013 statement of cash flows using the indirect method.

Which of the following material gains/losses would be disclosed as an extraordinary item on an entity's income statement?

Bradley's Inc.'s adjusted trial balance contains the following account balances at December 31, 2014: Income taxes are 30% on all items, and there were 2,000 shares of common stock outstanding during the year. Required: Prepare a statement of comprehensive income.

U.S. GAAP and IFRS companies commonly measure and report net income and comprehensive income.

If a company does not have any discontinued operations or extraordinary items to list on its income statement, the labels should still be there with a zero balance noted.

The SEC scrutinizes reported earnings numbers to assess the quality of earnings and to detect any potential for earnings management.

Together with the cash flow statement, the income statement enables the investors to determine the rate of return the company is generating relative to the amount of capital invested.

Tiger Corporation presents the following condensed comparative income statement for 2013, 2014, and 2015: Required: Prepare the rate of change analysis for Tiger 2014 and 2015.

List five purposes of the income statement.

Georgio Company began 2014 with net assets of $80,000. Net income calculated by using the capital maintenance concept was $21,000. During 2014 owners contributed $26,000 of new capital. By year-end, the net assets totaled $78,000. Dividends to the owners during 2014 were

The Demand for and Supply of Financial Accounting Information

Financial Reporting: Its Conceptual Framework

Review of a Companys Accounting System

The Balance Sheet and the Statement of Shareholders Equity

Cash and Receivables

Inventories: Cost Measurement and Flow Assumptions

Inventories: Special Valuation Issues

Current Liabilities and Contingencies

Property, Plant, and Equipment: Acquisition and Subsequent Investments

Depreciation, Depletion, Impairment, and Disposal

Intangibles

Investments and Long-Term Receivables

Financing Liabilities: Bonds and Notes Payable

Contributed Capital

Retained Earnings and Earnings Per Share

Advanced Issues in Revenue Recognition

Accounting for Income Taxes

Accounting for Postretirement Benefits

Accounting for Leases

The Statement of Cash Flows

Accounting for Changes and Errors

Time Value of Money Module

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