1. of the following would be classified as an extraordinary item on the income s
ID: 2541920 • Letter: 1
Question
1. of the following would be classified as an extraordinary item on the income statement?
MULTIPLE CHOICE
a. loss on disposal of a segment of business
b. a sale of land
c. loss on disposal of a segment of business
d. a loss from a flood in a location that would not be expected to flood
2. Employee Stock Ownership Plans (ESOPs):
MULTIPLE CHOICE
a. will not dilute the proportional ownership of existing shareholders.
b. may be created for a temporary purpose.
c. do not produce any tax advantages for plan participants.
d. may borrow funds from a bank.
3. The following relate to Data Original in 2008. What is the ending inventory?
Purchases
$540,000
Beginning Inventory
80,000
Customer Returns
10,000
Sales
800,000
Cost of Goods Sold
490,000
Multiple Choice
a.
$120,000
b.
$140,000
c.
$210,000
d.
$260,000
4. Which of the following will be disclosed in the reconciliation of retained earnings?
MULTIPLE CHOICE
a. net income / net loss
b. adjustment for an error of a prior period
c. dividends
d. all of the answers are correct
5. ____?____ are normally classified as a current liability on the balance sheet.
MULTIPLE CHOICE
a. Prepaid expenses
b. Land
c. Inventories
c. Accounts payable
6. ___?__ is considered a tangible asset.
MULTIPLE CHOICE
a. Equipment
b. A patent
c. A copyright
d. Goodwill
7. If the Investor Company owns 20% of the stock of Investee Company and Investee Company reports profits of $100,000, then Investor Company reports equity income of:
MULTIPLE CHOICE
a. $80,000
b. $20,000
c. $40,000
d. $60,000
8. A quasi-reorganization:
MULTIPLE CHOICE
a. may produce a positive balance in retained earnings
b. will restate retained earnings to zero.
c. should appear on the income statement as part of continuing operations
d. requires the approval of a bankruptcy court
9. Which of the following is seldomly a preferred stock characteristic?
MULTIPLE CHOICE
a. voting rights
b. call ability by the issuer
c. accumulation of dividends
d. preference in liquidation
10. Gross profit is the difference between:
MULTIPLE CHOICE
a. net income and operating income
b. revenues and expenses
c. sales and cost of goods sold
d. gross sales and sales discounts
a. loss on disposal of a segment of business
b. a sale of land
c. loss on disposal of a segment of business
d. a loss from a flood in a location that would not be expected to flood
Explanation / Answer
Solution 1:
Item that would be classified as an extraordinary item on the income statement is:
d. a loss from a flood in a location that would not be expected to flood as this loss was not expected in the normal course of business.
a. loss on disposal of a segment of business and c. loss on disposal of a segment of the business will be shown as discontinued operations and b. a sale of land will be shown while calculating Income from operations.
So correct answer is d.
c. loss on disposal of a segment of business
a. loss on disposal of a segment of business and c. loss on disposal of a segment of the business will be shown as discontinued operations and b. a sale of land will be shown while calculating Income from operations.
So correct answer is d.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.