ACC chapter 12 questions

which of the following items would be included in the discontinued operations section of the income statement?

Both the income or loss from operating the segment prior to its disposal, and the gain or loss on disposal of the segment.

liquidating dividend

Occurs when a corporation pays a dividend that exceeds the balance in the retained earnings account.

As a result of a 5% stock dividend:

The number of shares owned by each stockholder increases by 5%, but total stockholders' equity does not change.

which of the following would not be classified as an unusual and/ or infrequent item?

a loss from write down of inventory

the purpose of developing the subtotal "income from continuing operations" in an income statement is to

assist investors in forecasting future operating results

it would be reasonable to assume that

basic earnings per share should exceed diluted earnings per share

unusual and infrequent non-recurring items are found on the income statement

before discontinued operations

diluting earnings per share is a hypothetical computation to warn stockholders what could happen if

convertible securities are converted into shares of common stock

which of the following would have no effect on retained earnings?

declaration of stock split

of the items listed, which would appear closest to the bottom of the income statement?

discontinued operations

To receive the next cash dividend, an investor must purchase the stock before the:

ex-dividend date

The amount of earnings per share is usually computed:

for common stock by deducting the dividends on preferred stock from net income and dividing the remaining amount by the weighted average number of common shares outstanding

earnings per share figures are shown in the income statement

for income from continuing operations, discontinued operations, and net income

a small stock dividend is recorded at

market value

when a stock dividend is declared, total stockholders equity will

not change

a large stock dividend and a stock split are similar in that they both cause a

reduction in the market place per share

Dividends become a liability of a corporation:

the date the Board of Directors declares a dividend

in computing earnings per share, the number of shares used is

the weighted average of shares outstanding for the year