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Financial Accounting and Reporting Exam 1 Questions and Answers 100% Solved Companies report the results of operations of a component of a business that will be disposed of separately from continuing operations. -True -False - True Revenues and gains increase both net income and owners' equi...

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  • November 15, 2024
  • 17
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • Financial
  • Financial

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©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
Financial Accounting and Reporting

Exam 1 Questions and Answers 100%

Solved


Companies report the results of operations of a component of a business

that will be disposed of separately from continuing operations.

-True

-False - ✔✔True

Revenues and gains increase both net income and owners' equity.

-True

-False - ✔✔True

Which of the following would represent the least likely use of an income

statement prepared for a business enterprise?

-Use by customers to determine a company's ability to provide needed

goods and services.

-Use by labor unions to examine earnings closely as a basis for salary

discussions.

,©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
-Use by government agencies to formulate tax and economic policy.

-Use by investors interested in the financial position of the entity - ✔✔Use

by investors interested in the financial position of the entity

Which of the following is an example of managing earnings down?

-Changing estimated bad debts from 3 percent to 2.5 percent of sales

-Revising the estimated life of equipment from 10 years to 8 years

- Not wring off obsolete inventory

-Reducing research and development expenditures - ✔✔Revising the

estimated life of equipment from 10 years to 8 years

What might a manger do during the last quarter of a fiscal year if she

wanted improve current annual net income?

- Increase research and development activities

-Relax credit policies for customers

-Delay shipments to customers until after the end of the fiscal year

-Delay purchases from suppliers until after the end of the fiscal year -

✔✔Relax credit policies for customers

Which of the following is not generally practiced method of presenting the

income statement?

-Including prior period adjustments in determining net income.

, ©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
-The single-step income statement

-The consolidated statement of income

-Including gains and losses form discounted operations of a component of

a business in determining net income. - ✔✔Including prior period

adjustments in determining net income

The occurrence which most likely would have no effect on 2020 net

income(if all amounts involved are material) is the

-Sale in 2020 of an office building, acquired in 2001) at its book value

-Collection in 2020 of a receivable form a customer whose account was

written in 2016 by a charge to the allowance account

-Sale in 2020 of fully depreciated equipment for less than its salvage(book)

value

-None of the above - ✔✔Collection in 2020 of a receivable from a customer

whose account was written off in 2016 by a charge to the allowance

account

Which of the following is a required disclosure in the income statement

when reporting the disposal of a component of the business.

-The gain or loss on disposal should be reported as a unusual gain or loss

-Results of operations of a discontinued component should be disclosed

immediately before income form continuing operations

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