F1.M2

Question 1

How are revenue and expenses reported

Answer 1

At gross amounts

Question 2

How are gains and losses reported

Answer 2

at net amounts (proceeds less net book value)
Note: not net of income taxes

Question 3

what is included in inventory costs?

Answer 3

purchase price and freight in

Question 4

what is included in selling costs

Answer 4

freight out, salaries and commissions, advertising

Question 5

what is included in general and administrative

Answer 5

officers’ salaries, accounting and legal, insurance

Question 6

what is included in nonoperating

Answer 6

auxillary activities, interest xpense

Question 7

How should unusual and infrequent occurrences be presented on income statement?

Answer 7

Separately as a component of continued operations when transaction results in a gain or loss

Question 8

In a single step income statement, do you include the amounts for discontinued operations?

Answer 8

No

Question 9

Can discount on bonds payable be a current liability?

Answer 9

Yes if bonds payable amount is being presented as a current liability the the discount is also a current liability

Question 10

Is a deposit from a customer a current asset for a bank?

Answer 10

No it is a liability