8/19/2019 ACCT 304 Final Exam

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ACCT 304 Week 8 Final ExamACCT 304 Intermediate Accounting I

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1. Income from continuing operations sometimes includes gains from nonoperating activities.2. Income from continuing operations is an after-tax number consisting of revenues expensesgains and losses.3. Income from continuing operations e!uals net income onl" in t#e absence of separatel"reported items.4. Intraperiod tax allocation is t#e process of associating income tax effects $it# t#e incomestatement components t#at create t#ose effects.5. If t#e effective tax rate is 40% a &'00000 before-tax extraordinar" gain $ould increase netincome b" &'0000.. If eneral *otors ceased production of t#e Corvette it $ould report an" material gains orlosses t#at $ould result under discontinued operations.!. +iscontinued operations re!uire reclassification of prior "ears, income statements but noc#ange in prior "ears, net income.8. perating income or loss from discontinued operations up to t#e disposal date is separatel"reported.". T#e measurement and disposal dates of discontinued operations must fall $it#in t#e samefiscal "ear.10. If an overall loss from discontinued operations is expected t#en t#e loss is reported in t#e"ear in $#ic# t#e measurement date falls.11. stimated gains from discontinued operations can be reported in t#e measurement "ear onl"to t#e extent of estimated losses.12. An item must meet t#e sub/ective criteria of being bot# unusual and infre!uent to be reportedas extraordinar".13. T#e definition of $#at constitutes an extraordinar" item s#ould be independent of t#eoperating environment.14. *aterial restructuring costs are reported as an element of income from continuing operations.

15. T#e cumulative effect of a c#ange in accounting principle is t#e difference bet$een t#eending balance in retained earnings and $#at t#e balance $ould #ave been #ad t#e ne$ met#od been applied all "ear.1. A c#ange in reporting entit" is s#o$n separatel" on t#e income statement in t#e "ear of t#ec#ange.1!. All corporations must disclose 1.18. 1 disclosure is re!uired for all items reported net of tax on t#e income statement.1". 2et income is t#e starting point in disclosing compre#ensive income.20. ualit" of earnings refers to t#e abilit" of reported earnings or income to predict futureearnings.21. T#e distinction bet$een operating and nonoperating income relates to

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22. T#e principal benefit of separatel" reporting discontinued operations extraordinar" itemsand cumulative effects of c#anges in accounting principles is to en#ance23. Interperiod income tax allocation relates primaril" to t#e principle of24. An extraordinar" event for financial reporting purposes is bot#5nusual and infre!uent.25.

 T#e cumulative effect of a c#ange in accounting principle is reported asIncome from modified operations.2. T#e amount reported for t#e cumulative effect of a c#ange in accounting principle is t#e net-of-tax difference bet$een2!. T#e financial statement presentation of t#e cumulative effect of a c#ange in accounting principle is most similar to t#at of reporting28. In its +ec. 3 '000 financial statements *isterCard estimated t#at losses on its currentreceivables $ould be &6.' million. +uring '00 *isterCard determined t#at t#e losses on t#e+ec. 3 '000 receivables $ere actuall" &7.4 million. Ignoring taxes *isterCard $ould reportin its '00 financial statements t#e additional &.' million loss on receivables as2". 8#ic# of t#e follo$ing is not true about 1930.

T#e argas Corporation,s income statement includes net income extraordinar" items andt#e cumulative effect of a c#ange in accounting principle. arnings per s#are information $ould be provided for31. A reconciliation bet$een net income and compre#ensive income $ould include32. perating cas# flo$s $ould exclude33. T#e statement of cas# flo$s reports cas# flo$s from t#e activities of34. Cas# flo$s from financing activities include35. C#anges in accounting estimates are reported3. recepts Inc. incurred a material loss $#ic# $as not unusual in c#aracter but $as clearl" aninfre!uent occurrence. T#is loss s#ould be reported as3!. 1ulvane Co. reports income of &300000 from continuing operations before income taxes anda before-tax extraordinar" loss of &60000. All income is sub/ect to a 30% tax rate. In t#e "ear,sincome statement 1ulvane $ould s#o$ t#e follo$ing line-item amounts for income tax expenseand net income38. :e;ever Construction Co.,s '000 income from continuing operations before income taxes$as &'60000. :e;ever reported a before-tax extraordinar" gain of &

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from activities as follo$s42. arvo +og ;ood Co. reported net income of &4