Question 1

A corporation's distribution of its own shares to its shareholders without receiving any payment in return is a:

Accepted Answer

A)  Premium on shares. 
B)  Preferred share. 
C)  Discount on shares. 
D)  Share subscription. 
E)  Share dividend.

Question 2

Retrospective restatement of financial statements can result from:

Accepted Answer

A)  Changes in accounting policies. 
B)  Errors in the current income statements. 
C)  Changes in estimates. 
D)  Changes in tax law. 
E)  Contributed capital.

Question 3

Changes in accounting estimates are treated as accounting errors.

Accepted Answer

A) True 
 B)False

Question 4

Companies use share dividends:

Accepted Answer

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

Question 5

Reporting for discontinued operations includes:

Accepted Answer

A)  Income or loss from operating the discontinued segment net of tax). 
B)  Tax benefits of the discontinued segment. 
C)  Gain or loss from disposal of the segment's net assets net of tax). 
D)  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). 
E)  All of these answers are correct.

Question 6

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)  Operating segments. 
C)  Contributed capital. 
D)  Discontinued operations. 
E)  All of these answers are correct.

Question 7

A change from moving weighted average to FIFO reporting is:

Accepted Answer

A)  A change in accounting principle and is allowed if it improves the usefulness of information in the financial statements. 
B)  Allowed if it improves the usefulness of information in the financial statements. 
C)  Not allowed once an inventory costing method has been chosen. 
D)  A change in accounting principle and is not allowed even if it improves the usefulness of information in the financial statements. 
E)  A change that results in a discontinued operation.

Question 8

Share dividends are recorded at market value.

Accepted Answer

A) True 
 B)False

Question 9

Failure to record the declaration and distribution of a share dividend would:

Accepted Answer

A)  Cause an understatement of equity. 
B)  Cause the outstanding shares to exceed the equity. 
C)  Have no effect on total equity. 
D)  Cause an overstatement of equity. 
E)  Cause the balance sheet to be out of balance.

Question 10

A 10% share dividend increases the number of outstanding shares.

Accepted Answer

A) True 
 B)False

Question 11

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 12

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)  Set by a corporation's directors in order to limit dividends and maintain cash. 
C)  Statutory limits set by government. 
D)  Due to loan agreements. 
E)  All of these answers are correct.

Question 13

A share dividend increases the number of previously outstanding shares.

Accepted Answer

A) True 
 B)False

Question 14

After using an expected useful life of seven years and no residual value to depreciate its machine over the preceding two years, a company decided early this year that themachine would last only three more years. The change in accounting estimate results in an adjustment to ending retained earnings for the prior period with no impact on anyfuture periods.

Accepted Answer

A) True 
 B)False

Question 15

Explain the form and content of an expanded income statement for a corporation with discontinued operations.

Accepted Answer

The answer of Explain the form and content of an...

Question 16

Items) that would be included in other comprehensive income include:

Accepted Answer

A)  Net income. 
B)  Unrealized gains losses) on available-for-sale investments. 
C)  Unrealized gains losses) on held to maturity investments. 
D)  Unrealized gains losses) on held for trading investments. 
E)  Unrealized gains losses) on discontinued operation.

Question 17

Explain how to calculate earnings per share and how it is used for analysis of a company's financial status.

Accepted Answer

The answer of Explain how to calculate earnings per share...

Question 18

The journal entry to record $25,000 market value in share dividends on the date of declaration can be a debit to share dividends and a credit to common share dividends distributable.

Accepted Answer

A) True 
 B)False

Question 19

The financial statement impact for a company that desires to make a change in accounting policy includes):

Accepted Answer

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

Question 20

Shares that are reacquired and are not cancelled by the issuing corporation are called:

Accepted Answer

A)  Callable shares. 
B)  Redeemed shares. 
C)  Treasury shares. 
D)  Capital shares. 
E)  Preferred shares.

Exam 13: Corporate Reporting: Profit, Earnings Per Share, and Retained Earnings

A corporation's distribution of its own shares to its shareholders without receiving any payment in return is a:

Retrospective restatement of financial statements can result from:

Changes in accounting estimates are treated as accounting errors.

Companies use share dividends:

Reporting for discontinued operations includes:

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

A change from moving weighted average to FIFO reporting is:

Share dividends are recorded at market value.

Failure to record the declaration and distribution of a share dividend would:

A 10% share dividend increases the number of outstanding shares.

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

Restrictions on retained earnings can be:

A share dividend increases the number of previously outstanding shares.

Explain the form and content of an expanded income statement for a corporation with discontinued operations.

Items) that would be included in other comprehensive income include:

Explain how to calculate earnings per share and how it is used for analysis of a company's financial status.

The journal entry to record $25,000 market value in share dividends on the date of declaration can be a debit to share dividends and a credit to common share dividends distributable.

The financial statement impact for a company that desires to make a change in accounting policy includes) :

Shares that are reacquired and are not cancelled by the issuing corporation are called: