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

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ACCT304 Week 8 Final Exam: Financial Reporting And Income AnalysisACCT 304 WEEK 8 FINAL EXAM1. Income from continuing operations sometimes includes gains from nonoperating activities. (2points)TrueFalse2. Income from continuingoperations is an after-tax number consisting of revenues, expenses,gains, and losses. (2 points)TrueFalse3. Income from continuing operations equals net income only in the absence of separatelyreported items. (2 points)TrueFalse4.Intraperiod tax allocation is the process of associating income tax effects with the incomestatement components that create those effects. (2 points)TrueFalse5. If the effective tax rate is 40%, a $200,000 before-tax extraordinary gain would increase netincome by $120,000. (2 points)TrueFalse6. If General Motors ceased production of the Corvette, it would report any material gains orlosses that would result under discontinued operations. (2 points)TrueFalse7. Discontinued operations require reclassification of prior years' income statements but nochange in prior years' net income. (2 points)TrueFalse8. Operating income or loss from discontinued operations up to the disposal date is separatelyreported. (2 points)TrueFalse9. The measurement and disposal dates of discontinued operations must fall within the samefiscal year. (2 points)TrueFalse10. If an overall loss from discontinued operations is expected, then the loss is reported in theyear in which the measurement date falls. (2 points)

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TrueFalse11. Estimated gains from discontinued operations can be reported in the measurement year onlyto the extent of estimated losses. (2 points)TrueFalse12. An item must meet the subjective criteria of being both unusual and infrequent to be reportedas extraordinary. (2 points)TrueFalse13. The definition of what constitutes an extraordinary item should be independent of theoperating environment. (2 points)TrueFalse14. Material restructuring costs are reported as an element of income from continuing operations.(2 points)TrueFalse15. The cumulative effect of a change in accounting principle is the difference between theending balance in retained earnings and what the balance would have been had the new methodbeen applied all year. (2 points)TrueFalse16. A change in reporting entity is shown separately on the income statement in the year of thechange. (2 points)TrueFalse17. All corporations must disclose EPS. (2 points)TrueFalse18. EPS disclosure is required for all itemsreported net of tax on the income statement. (2points)TrueFalse19. Net income is the starting point in disclosing comprehensive income. (2 points)TrueFalse20. Quality of earnings refers to the ability of reported earnings or income to predict futureearnings. (2 points)True

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