Acc/531 Week 4

Chapter 04
The Income Statement and Statement of Cash Flows

True / False Questions

1. Income from continuing operations sometimes includes gains from nonoperating activities.
True False

2. Intraperiod tax allocation is the process of associating income tax effects with the income statement components that create those effects.
True False

3. Material restructuring costs are reported as an element of income from continuing operations.
True False

4. Earnings quality refers to the ability of reported earnings (income) to predict future earnings.
True False

5. Gains, but not losses, from discontinued operations must be separately reported in an income statement.
True False

6. An item must meet
Single-step income statement | Not directly related to a firm's principal | ____ |
| |revenue-generating activities. | |
|2. Financing activities | Likely to be discontinued within a year. | ____ |
|3. Held for sale component | Groups all revenues and gains. | ____ |
|4. Nonoperating activities (income | Related to the acquisition and disposition of long-term | ____ |
|statement) |assets. | |
|5. Investing activities | Related to the external financing of the company. | ____ |

23. Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the correct term placing the letter designating the best term in the space provided by the phrase.

|1. Cumulative effect of a change in accounting| Reported in the nonoperating section of the income | ____