accounting exam2 study

accounting exam2 study - 1. Investors and creditors can use...

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1. Investors and creditors can use the information in the income statement to A. B. Provide a basis for predicting future performance. C. Help assess the risk or uncertainty of achieving fu D. All of these. Investors and creditors can use the information in the income statement for all of the options listed. 2. Expenses include all of the following except A. B. Depreciation. C. Loss on sale of investments. D. Salaries and wages. All of the options are expenses except the loss on sale of investments. 3. In the single-step income statement, A. B. Just two groupings exist - revenues and expenses. C. Expenses are classified by functions, such as merc administration. D. An income from operations figure is presented. Just two groupings exist in the single-step income statement - revenues and expenses.
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4. A separation of operating and nonoperating activities of a company exists in A. B. A multiple-step but not a single-step income statem C. A single-step but not a multiple-step income statem D. Neither a single-step nor a multiple-step income st In a multiple-step income statement, a separation of operating and non operating activities is presented. 5. Irregular transactions such as discontinued operations and extraordinary items should be reported separately in A. B. A single-step income statement only. C. A multiple-step income statement only. D. Neither a single-step nor a multiple-step income st In both a single-step and multiple-step income statement, discontinued operations and extraordinary items should be separately reported.
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6. The gain or loss from disposal of a component of a business is shown as a (an) A. B. Part of discontinued operations. C. Extraordinary item. D. Prior period adjustment. Discontinued operations include the gain or loss from disposal of a component of a business. 7. All of the following would meet the criteria for an extraordinary item except gains or losses from A. B. Prohibition under a newly enacted law or regulatio C. An expropriation of assets. D. Exchange or translation of foreign currencies. All of the options would be classified as an extraordinary item except gains or losses from exchange of foreign currency.
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8. A change in the method of inventory pricing from FIFO to average cost would be accounted for as a (an) A. B. Extraordinary item. C. Change in accounting principle. D. Change in estimate. Changes in accounting principle would include a change in the method of inventory pricing. 9. Intraperiod tax allocation is used for all of the following except A. B. Discontinued operations. C. Extraordinary items. D. Unusual gains/losses. Intraperiod tax allocation is applied to all of the options except unusual gains/losses.
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10. Which of the following statements related to extraordinary items and intraperiod tax allocation is correct? A.
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accounting exam2 study - 1. Investors and creditors can use...

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