Update1-31. In recording transactions, which of the following best describes the relation between expenses and losses?
A. Each item (net of tax) is presented on the face of the income statementseparately as a component of net income for the period., B. Each item is presented exclusive of any related income tax., C. Each item is presented as an unusual item within income from continuingoperations., D. All extraordinary gains or losses that occur in a period are summarized astotal gains and total losses, then offset to present the net extraordinary gainor loss.,
2. Because of inexact estimates of the service life and the residual value of a plant asset, a fully depreciated asset was sold in the current year at a material gain. This gain most likely should be reported
A. Discontinued operations., B. Extraordinary loss., C. Cumulative effect of a change in an accounting principle., D. Unusual loss from a write-down of inventory.,
3. Comprehensive income is best defined as
A. Loss from discontinued operations., B. Gross profit., C. Extraordinary gain., D. Net income from continuing operations.,
4. Assume that employees confessed to a $500,000 inventory theft but are not able to make restitution. How should this material fraud be shown in the company’s financial statements?
A. Dividends declared, prior period adjustments, and changes due to treasurystock transactions., B. Before-tax income or loss and dividends paid or declared. distant learning , C. Prior-period adjustments, before-tax income or loss, income tax, anddividends paid, D. Net income or loss, prior-period adjustments, and dividends paid ordeclared.,
5. Crawford Company is researching a future change to IFRS. Which one of the following items reported on Crawford’s income statement under U.S. GAAP is required to be changed as a result of adopting IFRS?
A. In the other revenues and gains section of the current income statement., B. As part of sales revenue on the current income statement. quiz generator , C. In the extraordinary item section of the current income statement., D. As an adjustment to prior periods’ depreciation on the statement of changesin equity.,
6. tems reported as prior-period adjustments
A. Losses are extraordinary charges to income, whereas expenses are ordinary charges to income., B. Losses are material items, whereas expenses are immaterial items., C. Losses are expenses that may or may not arise in the course of ordinary activities., D. Expenses can always be prevented, whereas losses can never be prevented.,
7. All of the following are defined as elements of an income statement except
A. $90, B. $135 active teaching , C. $150 dynamic quiz , D. $180,
8. In a multiple-step income statement for a retail company, all of the following are included in the operating section except
A. Classified as a loss and shown as a separate line item in the income statement., B. Initially classified as an accounts receivable because the employees are responsible for thegoods. Because they cannot pay, the loss would be recognized as a write-off of accountsreceivable., C. Included in cost of goods sold because the goods are not on hand, losses on inventoryshrinkage are ordinary, and it would cause the least amount of attention., D. Recorded directly to retained earnings because it is not an income-producing item.,
9. When reporting extraordinary items,
A. $1,480,000, B. $1,500,000, C. $1,610,000, D. $1,650,000,
10. A company reports the following information as of December 31: Sales revenue $800,000 Cost of goods sold 600,000 Operating expenses 90,000 Unrealized holding gain on available-for-sale securities, net of tax 30,000 What amount should the company report as comprehensive income as of December 31?
A. $46,110, B. $49,890, C. $110,110, D. $113,890,
11. Which one of the following items is included in the determination of income from continuing operations?
A. $101,400, B. $127,650, C. $130,150, D. $157,650,
12. The profit and loss statement of Madengrad Mining includes the following information for the current fiscal year: Sales $160,000 Gross profit 48,000 Year-end finished goods inventory 58,300 Opening finished goods inventory 60,190 The cost of goods manufactured by Madengrad for the current fiscal year is
A. $500,000, B. $600,000, C. $800,000, D. $950,000,
13. Which one of the following would be shown on a multiple-step income statement but not on a single-step income statement?
A. $460,500 and $489,500, respectively., B. $468,500 and $439,500, respectively., C. $468,500 and $470,900, respectively., D. $646,500 and $617,500, respectively.,
14. An entity had the following opening and closing inventory balances during the current year: 1/1 12/31 Finished goods $ 90,000 $260,000 Raw materials 105,000 130,000 Work-in-progress 220,000 175,000 The following transactions and events occurred during the current year: $300,000 of raw materials were purchased, of which $20,000 were returned because of defects. $600,000 of direct labor costs were incurred. $750,000 of production overhead costs were incurred.The cost of goods sold for the current year ended December 31 would be
A. Net income excluding extraordinary gains and losses., B. The change in net assets for the period including contributions by ownersand distributions to owners. class web page , C. Total revenues minus total expenses., D. The change in net assets for the period excluding owner transactions.,
15. Given the following data for Scurry Company, what is the cost of goods sold? Beginning inventory of finished goods $100,000 Cost of goods manufactured 700,000 Ending inventory of finished goods 200,000 Beginning work-in-process inventory 300,000 Ending work-in-process inventory 50,000
A. Income statement., B. Statement of financial position., C. Statement of shareholders’ equity., D. Statement of retained earnings.,
16. The major segments of the statement of retained earnings for a period are
A. Extraordinary gains from extinguishment of debt., B. Foreign currency translation adjustments., C. Prior service cost adjustment resulting from amendment of a definedbenefit pension plan, D. Unrealized gains for the year on available-for-sale marketable securities.,
17. The financial statement that provides a summary of the firm’s operations for a period of time is the
A. I and II only., B. I, II, and III only., C. III and IV only., D. I and IV only.,
18. The following information was taken from last year’s accounting records of a manufacturing company. Inventory January 1 December 31 Raw materials $38,000 $ 45,000 Work-in-process 21,000 10,000 Finished goods 78,000 107,000 Other information Direct labor $236,000 Shipping costs on outgoing orders 6,500 Factory rent 59,000 Factory depreciation 18,700 Advertising expense 24,900 Net purchases of raw materials 115,000 Corporate administrative salaries 178,000 Material handling costs 35,800 On the basis of this information, the company’s cost of goods manufactured and cost of goods sold are
A. $30,000, B. $110,000, C. $140,000, D. $200,000,
19. If the beginning balance for May of the materials inventory account was $27,500, the endingbalance for May is $28,750, and $128,900 of materials were used during the month, thematerials purchased during the month cost
A. Crawford values its merchandise inventory using average cost., B. Crawford uses a multiple-step approach for its income statement., C. Crawford uses historical cost to value its land, buildings, and intangible assets even though the value of the land and building are greater than book value., D. Crawford’s current-year income statement includes an extraordinary loss.,
20. Which of the following items is not classified as other comprehensive income (OCI)?
A. Expenses., B. Shareholders’ equity., C. Gains and losses., D. Revenues.,
21. Which of the following are acceptable formats for reporting comprehensive income? I. In one continuous financial statement II. In a statement of changes in equity III. In a separate statement of net income IV. In two separate but consecutive financial statements
A. Do not include the effect of a mistake in the application of accounting principles, as this is accounted for as a change in accounting principle rather than as a prior-period adjustment., B. Do not affect the presentation of prior-period comparative financialstatements. online , C. Do not require further disclosure in the body of the financial statements., D. Are reflected as adjustments of the opening balance of the retained earnings of the earliest period presented.,