F1 M2

Question 1

What is the income from continuing operations?

Answer 1

Income from continuing operations is the sum of operating (rev + exp) and non-operating
(gains + losses)

Question 2

What are examples of selling cost?

Answer 2

Selling cost: Freight-out, commission, advertising, and salaries of normal workers, rent
of the normal, salaried employees using buildings of the comp

Question 3

What is general and administrative?

Answer 3

General and administrative: Accounting and legal, insurance, salary of officers, and
property taxes

Question 4

What does GM =

Answer 4

GM = Rev - COGS

Question 5

What are examples of multi-step IS?

Answer 5

Line item titles and totals is multi-step IS: Gross margin, income (loss) from operating,
other revs and gains, other expenses and losses, income before unusual items and
income tax, income before income tax, income from continuing operations, disc ops (net
of tax), NI

Question 6

What is a long-term asset?

Answer 6

Payment into a bond sinking fund is a long-term asset

Question 7

What is a bond sinking fund?

Answer 7

Bond sinking fund: Restricted cash put into an account that is used to either redeem the
bonds or buy them back

Question 8

What is Disc and premium?

Answer 8

Disc and premium is a liability (reported w/bonds payable)

Question 9

is DTL and DTA long term or short term?

Answer 9

DTL and DTA are long term