CH 4: Statement of Cash Flows

Which of the following activities would constitute discontinued operations? (select all that apply)

-A U.S. cereal manufacturer commits to a plan to dispose of its operations in the EU. -A retail company, like Target, sells its financial services (credit card) business.

Which of the following would most likely affect earnings quality? (Select all that apply.)

-Accelerating revenue recognition. -Losing a major customer.

How are discontinued operations reported? (Select all that apply.)

-Below income from continuing operations. -As a separate line item on the income statement. -With separate reporting of the tax effect on the item of discontinued operations.

A multiple-step income statement includes which of the following? (Select all that apply.)

-Gross profit -Income before taxes -Operating income

Which of the following are acceptable methods of presenting the income statement? (Select all that apply.)

-Multiple-step format -Single-step format

Which of the following items are reported as components of operating income for most manufacturing and merchandising companies? (Select all that apply.)

-administrative expenses -revenues -selling expenses

Which of the following items are included in calculating operating income? (Select all that apply.)

-expenses related to primary revenue-generating activities -revenues related to primary revenue-generating activities

Which of the following are acceptable methods for reporting comprehensive income? (Select all that apply.)

-in two consecutive statements - income statement and comprehensive income statement -In one single statement of comprehensive income

The income tax expense or benefit associated with discontinued operations (Select all that apply.)

-is reported separately from the tax computation for continuing operations. -is included in the computation of net income.

The advantages of a multiple-step income statement is (Select all that apply.)

-it reports the relationships between various items. -it provides more information than a single-step income statement. -it reports expenses by function.

Accumulated other comprehensive income (AOCI) is found on what financial statement?

Balance sheet

Which accounting standard(s) allow companies to choose between the one and the two statement approach for reporting comprehensive income?

Both U.S. GAAP and IFRS

Revaluation surplus is reported as other comprehensive income under

IFRS

Statement of operations and statement of earnings are additional titles for the

Income Statement

The potential tax expense or benefits of items reported as components of Other Comprehensive Income

can be shown separately for each item or aggregated and reported as one line item

What basis is used for estimated restructuring costs?

fair value

Any long-lived asset, whether tangible or intangible, should have its balance reduced if there has been a significant of value. (Enter only one word.)

impairment/decline/decrease/reduction/loss

The initial measurement of restructuring liabilities is at fair value, which often is estimated as the ___ ___ of estimated future cash outflows.

present; value

Analyzing earnings quality requires an analyst to

separate a company's temporary and permanent earnings.