The income statement can be used to assess
liquidity.
solvency.
creditworthiness.
all of these answer choices are correct. C
Which of the following occur from peripheral or incidental transactions?
Operating expenses.
Gain on the sale of equipment.
Sales revenue.
Cost of goods sold. B
Whi...
ACG 3131 Exam 2 Questions and
Correct Answers
The income statement can be used to assess
liquidity.
solvency.
creditworthiness.
all of these answer choices are correct. ✅C
Which of the following occur from peripheral or incidental transactions?
Operating expenses.
Gain on the sale of equipment.
Sales revenue.
Cost of goods sold. ✅B
Which of the following is an acceptable method of presenting the income statement?
A classified income statement.
A current operating performance income statement.
A condensed income statement.
None of these answer choices are correct. ✅C
Which of the following would be reported in a separate income statement category,
separately from continuing operations, on the income statement?
Unusual gains.
Income tax expense.
Unusual losses.
Discontinued operations. ✅D
, Discontinued operations occur when a company eliminates the results of operations of a
component of the business. The elimination of the component need not represent a
strategic shift, having a major effect on the company's operations and financial results.
True
False ✅F
Companies are required to highlight certain items in the financial statements so that
users can better determine the long-run earning power of the company. Which of the
following is not one of those items?
Noncontrolling interest.
Changes in accounting principle.
Discontinued operations.
Unusual gains and losses. ✅B
Earnings per share (EPS) is net income minus preferred dividends (income available to
common stockholders), divided by the weighted average of common shares
outstanding.
True
False ✅T
When a company transfers an amount of restricted retained earnings into a different
account, that account is titled
Noncontrolling Retained Earnings.
Appropriated Retained Earnings.
Unappropriated Retained Earnings.
Comprehensive Retained Earnings. ✅B
An advantage of the nature-of-expense method under IFRS is that it
is simple to apply.
is viewed as more relevant.
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