Chapter 4 Quiz

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1
Enter the letter corresponding to the response that best completes each of the following statements or questions.
Which of the following captions would more likely be found in a multiple-step income statement?
A)
Total expenses.
B)
Total revenues and gains.
C)
Gross profit.
D)
None of the above.
2
n item t!picall! included in the income from continuing operations section of the income statement is"
A)
#iscontinued operations.
B)
Extraordinar! gain.
C)
$rior period ad%ustment.
D)
&estructuring costs.
3
The application of intraperiod income taxes requires that income taxes be apportioned to each of the following
items except"
A)
'ncome from continuing operations.
B)
(perating income.
C)
#iscontinued operations.
D)
Extraordinar! gains and losses.
4
)or a manufacturing compan!* each of the following items would be considered nonoperating income for income
statement purposes except"
A)
'ncome from investments.
B)
+ost of goods sold.
C)
'nterest expense.
D)
Gain on sale of investments.
5
(n ,a! -.* /0.-* the rlene +orporation adopted a plan to sell its cosmetics line of business* considered a component
of the entit!. The assets of the component were sold on (ctober .-* /0.-* for 1.*./0*000. The component generated
operating income from 2anuar! .* /0.-* through disposal of 1-00*000. 'n its income statement for the !ear ended
#ecember -.* /0.-* the compan! reported before-tax income from operations of a discontinued component of
13/0*000. What was the boo4 value of the assets of the cosmetics component?
A)
1500*000
B)
1.*6/0*000
C)
1-00*000
D)
None of the above.
6
The +ompton $ress +ompan! reported income before taxes of 1/70*000. This amount included a 170*000 extraordinar!
loss. The amount reported as income before extraordinar! items* assuming a tax rate of 608* is"
A)
1/70*000
B)
1.50*000
C)
1./0*000
D)
1.70*000
7
Which of the following material items would not be reported as an extraordinar! item?
A)
loss caused b! an unusual and infrequent hurricane.
B)
loss caused b! an unusual and infrequent volcano.
C)
loss caused b! obsolescence of inventor!.
D)
ll of the above would be reported as extraordinar! items.
8
The 9tibbe +onstruction +ompan! switched from the completed contract method to the percentage-of-completion
method of accounting for its long-term construction contracts. This is an example of"
A)
change in accounting principle.
B)
change in accounting estimate.
C)
n infrequent but not unusual item.
D)
n extraordinar! item.
9
Earnings per share should be reported for each of the following income statement captions except:
A)
'ncome from continuing operations.
B)
Extraordinar! gains and losses.
C)
(perating income.
D)
#iscontinued operations.
10
The following items appeared in the /0.- !ear-end trial balance for the :rown +offee +ompan!"
'ncome tax expense has not !et been accrued. The compan!;s income tax rate is 608. What amount should be
reported in the compan!;s !ear /0.- income statement as income before extraordinar! items?
A)
1<0*000
B)
133*000
C)
1-6*500
D)
176*000
11
9elected information from the /0.- accounting records of #unn;s uto #ealers is as follows"
'n its /0.- statement of cash flows* #unn;s should report net cash inflows from financing activities of"
A)
1/30*000
1/37*000
B)
C)
130*000
D)
1/73*000
12
=sing the information in question ..* #unn;s should report net cash outflows from investing activities of"
A)
1/>*000
B)
1-/*000
C)
1/5*000
D)
1/-*000
13
Which of the following items would not be included as a cash flow from operating activities in a statement of cash flows?
A)
+ollections from customers.
B)
'nterest on note pa!able.
C)
$urchase of equipment.
D)
$urchase of inventor!.
14
'n a statement of cash flows* 'nternational )inancial &eporting 9tandards allow companies to report interest paid as"
A)
Either an operating or investing cash flow.
B)
Either an investing or financing cash flow.
C)
n operating cash flow onl!.
D)
Either an operating or a financing cash flow.