Test Bank For Intermediate Accounting 9th Edition By Spiceland
Chapter 4 The Income Statement, Comprehensive Income, and the Statement of Cash Flows
True/False Questions
- Income from continuing operations sometimes includes gains from nonoperating activities.
Answer: True
Level of Learning: 1 Easy
Learning Objective: 04-01
Topic Area: Continuing operations―Components Blooms: Remember
AACSB: Reflective thinking
AICPA: BB Critical thinking
AICPA: FN Measurement - The single-step format of the income statement first lists all the revenues and gains included in income from continuing operations.
Answer: True
Level of Learning: 1 Easy
Learning Objective: 04-01
Topic Area: Income statement―Single-step format Blooms: Remember
AACSB: Reflective thinking
AICPA: BB Critical thinking
AICPA: FN Measurement - The single-step format of the income statement does not separately report nonoperating gains in the revenues section of the income statement.
Answer: False
Level of Learning: 2 Medium
Learning Objective: 04-01
Topic Area: Income statement―Single-step format Blooms: Remember
AACSB: Reflective thinking
AICPA: BB Critical thinking
AICPA: FN Measurement - The multiple-step format of the income statement reports a series of intermediate subtotals such as gross profit, operating income, and income before taxes.
Answer: True
Level of Learning: 1 Easy
Learning Objective: 04-01
Topic Area: Income statement―Multiple-step format Blooms: Remember
AACSB: Reflective thinking
AICPA: BB Critical thinking
AICPA: FN Measurement
4–1
Chapter 4 The Income Statement, Comprehensive Income, and the Statement of Cash Flows
- Intraperiod tax allocation is the process of associating income tax effects with the income statement components that create those effects.
Answer: True
Level of Learning: 1 Easy
Learning Objective: 04-04
Topic Area: Discontinued operations Blooms: Remember
AACSB: Reflective thinking AICPA: BB Critical thinking AICPA: FN Measurement - Material restructuring costs are reported as an element of income from continuing operations.
Answer: True
Level of Learning: 1 Easy
Learning Objective: 04-03
Topic Area: Earnings quality – Restructuring costs Blooms: Remember
AACSB: Reflective thinking
AICPA: BB Critical thinking
AICPA: FN Measurement - Restructuring costs most often refer to costs associated with management’s plans to materially change the scope of business operations or the manner in which they are conducted.
Answer: True
Level of Learning: 1 Easy
Learning Objective: 04-03
Topic Area: Earnings quality – Restructuring costs Blooms: Remember
AACSB: Reflective thinking
AICPA: BB Critical thinking
AICPA: FN Measurement - Earnings quality refers to the ability of reported earnings (income) to predict future earnings.
Answer: True
Level of Learning: 1 Easy
Learning Objective: 04-02
Topic Area: Earnings quality―Management practices Blooms: Remember
AACSB: Reflective thinking
AICPA: BB Critical Thinking
AICPA: FN Risk Analysis
4–2
Chapter 4 The Income Statement, Comprehensive Income, and the Statement of Cash Flows
- Income from continuing operations consists only of those items expected to be permanent components of earnings.
Answer: False
Level of Learning: 1 Easy
Learning Objective: 04-02
Topic Area: Earnings quality―Components Blooms: Remember
AACSB: Reflective thinking
AICPA: BB Critical Thinking
AICPA: FN Risk Analysis - Interest expense typically is considered a temporary component of earnings.
Answer: False
Level of Learning: 2 Medium
Learning Objective: 04-02
Topic Area: Earnings quality―Components Blooms: Understand
AACSB: Reflective thinking
AICPA: BB Critical Thinking
AICPA: FN Risk Analysis
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