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ACCT 304 Week 8 Final Exam: Financial Reporting And Income Analysis

Final exam covering financial reporting and income analysis.

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    A CCT 304 Week 8 Final Exam: Financial Reporting And Income Analysis ACCT 304 WEEK 8 FINAL EXAM 1. Income from continuing operations sometimes includes gains from nonoperating activities. (2 points) True False 2. Income from continuing operations is an after - tax number consisting of revenues, expenses, gains, and losses. (2 points) True False 3. Income from continuing operations equals net income only in the absence of separately reported items. (2 points) True False 4. Intraperiod tax allocation is the process of associating income tax effects with the income statement components that create those effects. (2 points) True False 5. If the effective tax rate is 40%, a $200,000 before - tax extraordinary gain would increase net income by $120,000. (2 points) True False 6. If General Motors ceased production of the Corvette, it would report any material gains or losses that would result under discontinued operations. (2 points) True False 7. Discontinued operations require recl assification of prior years' income statements but no change in prior years' net income. (2 points) True False 8. Operating income or loss from discontinued operations up to the disposal date is separately reported. (2 points) True False 9. The measurement and disposal dates of discontinued operations must fall within the same fiscal year. (2 points) True False 10. If an overall loss from discontinued operations is expected, then the loss is reported in the year in which the measurement date falls. (2 point s)

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    True False 11. Estimated gains from discontinued operations can be reported in the measurement year only to the extent of estimated losses. (2 points) True False 12. An item must meet the subjective criteria of being both unusual and infrequent to be reported as extraordinary. (2 points) True False 13. The definition of what constitutes an extraordinary item should be independent of the operating environment. (2 points) True False 14. Material restructuring costs are reported as an element of income from co ntinuing operations. (2 points) True False 15. The cumulative effect of a change in accounting principle is the difference between the ending balance in retained earnings and what the balance would have been had the new method been applied all year. (2 points) True False 16. A change in reporting entity is shown separately on the income statement in the year of the change. (2 points) True False 17. All corporations must disclose EPS. (2 points) True False 18. EPS disclosure is required for all items reported net of tax on the income statement. (2 points) True False 19. Net income is the starting point in disclosing comprehensive income. (2 points) True False 20. Quality of earnings refers to the ability of reported earnings or income to predict future earnings. (2 points) True

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