Income Statement Flashcards

1
Q

What is the presentation order of Income and Retained Earnings Statements?

A

IDEA- Income from continuing Operations, Income from Discontinued Operations, Extraordinary Items, Cumulative effective of a change in accounting principle.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Which items in the income statement is reported gross of tax?

A

Income from continuing operations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

which items in the income statement is reported net of tax?

A

Income from discontinued operations, extraordinary items, cumulative effect of change in Accounting Principle

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

True/False: The Multiple Step income statement is required for all GAAP users?

A

False- Multistep or Single Step income statement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

True/False: The Multiple Step Income statement shows operating and nonoperating income from continuing operations

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What three segments make up the income (loss) from Discontinued Operations Segment of the Income Statement?

A
  1. Impairment losses. 2. Gain/loss from actual operations 3. Gain/loss on disposal.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Under US GAAP when is expectation of the sale a business component to be considered held for sale?

A

1 year from the date of the financial statements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Before/After: Under IFRS, a component must be remeasured for impairment or gains (before or after) it is listed as held for sale?

A

Before

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

True/False: Assets held for sale continue to be depreciated/amortized.

A

False- they suspend their deprecation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is the equation to calculate impairment losses on a component disposed/held for sale?

A

NRV(Net Realizable Value= Fair Value - Cost to sale) - carrying value (Value on the books) = impairment loss(negative number)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

True False: Certain gains are losses from the extinguishment of debt can be classified as an extraordinary item

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

True/False, In IFRA there is a provision for extraordinary items

A

False - nothing is considered extraordinary in IFRS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

How is a change in accounting estimate handled?

A

As a prospective change with a disclosure in the footnotes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

How is a change in accounting principle handled?

A

Retrospective change, and adjustments to restate of prior periods

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the exception to the handling of an accounting principle

A

If it is impractical to estimate the cumulative effective then it is handled prospectively

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

How is a change in deprecation method (e.g double deprecation to straight line) handled?

A

Prospectively - no retrospective adjustment needed

17
Q

How is a change in accounting entity handled?

A

Retrospective change that follows a restatement of prior periods.

18
Q

How is a change in accounting error handled?

A

Retrospective change for a restatement.