Accounting Homework due at 11 p.m.?

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1.Which of the following is not an irregular item on the income statement?

A. Extraordinary items

B. All of these are irregular items

C. Other revenues and expenses

D. Discontinued operations


2.How are irregular items reported on the income statement?

A. As part of other revenues and expenses

B. In a separate section below cost of goods sold

C. As part of sustainable income

D. In a separate section below income from sustainable operations


3.Which of the following is considered a disposal of a significant component of a business?

A. Shifting production activities from one location to another

B. Elimination of a major class of customers

C. Phasing out of a model

D. Disposal of part of a line of business


4.Where are extraordinary items reported on the income statement?

A. Immediately below income before income taxes

B. Immediately after discontinued operations

C. Immediately below income from continuing operations

D. Immediately before income before income taxes


5.Which of the following is not considered to be an extraordinary item?

A. Expropriation of property by a foreign government

B. Effects of rare major natural casualties

C. Effects of a newly enacted law or regulation

D. Losses attributable to a labor strike


6.According to the FASB, what is added to or subtracted from net income to determine comprehensive income?

A. All changes in stockholders’ equity except changes resulting from transactions with stockholders

B. All changes in stockholders’ equity

C. Dividends

D. Additional investments by the stockholders


7.Which of the following is income that includes all changes in stockholders' equity during a period except those resulting from investments by stockholders and distributions to stockholders?

A. Comprehensive income

B. Net income

C. Sustainable income

D. Income from continuing operations


8.Who is most interested in a company’s liquidity?

A. Competitors

B. Long-term creditors

C. Short-term creditors

D. Stockholders


10.All of the following may be indicators of channel stuffing except

A. customers incentives for buying early.

B. an extremely good earnings period followed by several subsequent bad periods.

C. inventory levels that reflect seasonal demand levels.

D. deep discounts to customers.


11.Which situation below might indicate a company has a low quality of earnings?

A. The same accounting principles are used each year.

B. The financial statements are prepared in accordance with generally accepted accounting principles.

C. Repair costs are capitalized and then depreciated.

D. Revenue is recognized when earned.


12.All of the following situtations below might indicate a company has a low quality of earnings except:

A. Revenue is recognized when earned.

B. Maintenance costs are capitalized and then depreciated.

C. Adoption of a different inventory method for each of the last three years.

D. A lack of disclosure about guaranteed payments that were mentioned in the MD&A of the annual report.