ACCT 315

Income Tax

A section reporting federal and state taxes levied on income from continuing operations.

Operating cash outflows would include

A. Purchase of investments B. Purchase of equipment C. Payment of cash dividends D. Purchases of inventory Answer is D

Non-Controlling Interests

Allocation of income to noncontrolling shareholders

When a company discontinues an operation and disposes of the discontinued operation the transaction should be included in the income statement as a gain or loss on disposal reported as:

An amount after continuing operations

The stockholders' equity section is usually divided into what three parts?

Capital Stock, additional paid-in-capital, retained earnings

Which of the following is not an acceptable way of displaying the components of other comprehensive income?

Combined statement of retained earnings

Which of the following items would be reported net of tax on the face of the income statement?

Discontinued operations

Which of the following is not a long -term investment?

Franchise

Which of the following is not a current liability?

Prepaid Rent

The financial statement which summarizes operating, investing, and financing activities for an entity for a period of time

Statement of cash flows

Which of the following is not a selling expense?

a. advertising expense B office salaries expense (This is not a selling expense because it does not have to do with sales) c. freight-out d. store supplies consumed

The correct order to present current assets is

a.Cash, accounts receivable, prepaid items, inventories. b.Cash, accounts receivable, inventories, prepaid items. c.Cash, inventories, accounts receivable, prepaid items. Cash, inventories, prepaid items, accounts receivable Answer: B/ Order of Liquidity

A separation of operating and non operating activities of a company exists in

a.both a multiple-step and single-step income statement. b.a multiple-step but not a single-step income statement. c.a single-step but not a multiple-step income statement. d.neither a single-step nor a multiple-step income statement. Answer B

The income statement reveals

net earnings (net income) of a firm for a period of time.

The single-step income statement emphasizes

total revenues and total expenses

Gains and losses that bypass net income but affect stockholders' equity are referred to as

a.comprehensive income. b.other comprehensive income. c.prior period income. d.unusual gains and losses. Answer B

In calculating earnings per share, companies deduct preferred dividends from net income if:

the dividends are declared

Discontinued Operations

material gains or losses resulting from the disposition of a component of the business

Treasury stock should be reported as

reduction of stockholders' equity