Chapter 4 Final Exam Study Flashcards Preview

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Flashcards in Chapter 4 Final Exam Study Deck (12):
1

Which of the following captions would more likely be found in a multiple-step income statement?
-Total expenses.
-Total revenues and gains.
-Operating income.
-All of these answer choices are incorrect.

Operating income.

2

An item typically included in the income from continuing operations section of the income statement is:

Restructuring costs.

3

For a manufacturing company, each of the following items would be considered non-operating income for income statement purposes except:
-Income from investments.
-Cost of goods sold.
-Interest expense.
-Gain on sale of investments.

Cost of goods sold.

4

On May 31, 2018, the Arlene Corporation adopted a plan to sell its cosmetics line of business, considered a component of the entity. The assets of the component were sold on October 13, 2018, for $1,120,000. The component generated operating income from January 1, 2018, through disposal of $300,000. In its income statement for the year ended December 31, 2018, the company reported before-tax income from operations of a discontinued component of $620,000. What was the book value of the assets of the cosmetics component?

$800,000 ((1,120,000-620,000)+300,000)

5

The Compton Press Company reported income before taxes of $250,000. This amount included a $50,000 loss on discontinued operation. The amount reported as income from continuing operations, assuming a tax rate of 40%, is:

$180,000

6

The Stibbe Construction Company switched from the completed contract method to the percentage-of-completion method of accounting for its long-term construction contracts. This is an example of:

A change in accounting principle.

7

Earnings per share should be reported for each of the following income statement captions except:
-Income from continuing operations
-Discontinued operations
-Operating income
-Net income

Operating income

8

Which of the following items would not be included as a cash flow from operating activities in a statement of cash flows?
-Collections from customers.
-Interest on note payable.
-Purchase of equipment.
-Purchase of inventory.

Purchase of equipment.

9

In a statement of cash flows, International Financial Reporting Standards allow companies to report interest paid as:

Either an operating or a financing cash flow.

10

Smith Company earns a 12% return on assets. If net income is $720,000, average total assets must be:

$6,000,000

11

The Esquire Company reported sales of $1,600,000 and cost of goods sold of $1,122,000 for the year ended December 31, 2018. Ending inventory for 2017 and 2018 was $420,000 and $460,000, respectively. Esquire's inventory turnover for 2018 is:

2.55

12

The application of intraperiod income taxes requires that income taxes be apportioned to each of the following items except:

Operating income.