Question : 31.Comprehensive income a.may be reported a separate statement or the face : 1253549

31.Comprehensive income

a.may be reported on a separate statement or on the face of the income statement.

b.can be used as an alternative format of the traditional income statement.

c.includes some revenue and expense items that are part of continuing operations.

d.can be prepared instead of the shareholders’ equity section of the balance sheet.

32.Paulson, Inc. reported net income of $60,000 during 2010. Throughout 2010, 20,000 shares of common stock and 5,000 shares of preferred stock were outstanding. The preferred stock has no dividend preference.  Evans reported earnings only for continuing operations items. How much is earnings per share for 2010?

a.$3.00

b.$12.00

c.$2.00

d.Not enough information is provided.

33.Intraperiod tax allocation

a.is applied to each income statement item to provide creditors and investors a better indication of the company’s true revenues and expenses.

b.is a method of allocating income taxes over multiple accounting periods.

c.is applied only to revenues since expenses are not taxed.

d.is applied to net income from continuing operations.

34.Which one of the following items is considered part of comprehensive income but not reported as part of net income?

a.Accounting principle changes

b.Foreign currency translation adjustments

c.Gain on sale of land

d.Dividend revenue

35.Why is income so important to both investors and stock analysts?

a.It is strongly correlated to the market price of stock and bond prices.

b.It is equal to the amount that shareholders will receive as dividends.

c.Income is tied directly to revenue, i.e., a company that reports a large amount of revenue will always report a large amount of income.

d.It identifies if the company will be able to pay its current debts when they become due.

36.Which one of the following is true concerning discontinued operations?

a.It relates primarily to product changes in a company.

b.The gain or loss associated with the disposal is shown separately as a component of continuing operations on the income statement.

c.It is reported with ‘other revenues and losses’ on the company’s income statement.

d.One of two separate disclosures required is income or loss from the segment’s operations from the beginning of the current accounting period to the date of disposal.

37.An income statement prepared with separate components

a.enables users to distinguish transactions that are due to operations from those that are not useful as predictors of future performance.

b.is prepared for income items that are frequent and usual.

c.is used primarily by companies involved with complex financing transactions.

d.may replace a statement of cash flows.

38.Diluted earnings per share

a.is required for companies that have the potential for liquidation.

b.is a financing and investing activity.

c.shows the effects of possible increases in the number of outstanding common shares.

d.is reported for the ‘other revenues and expenses’ category on the income statement.

39.A company should report a cumulative effect of an accounting principle change when

a.consistency has been violated.

b.errors are made and subsequently corrected.

c.FASB mandates a change from one method to another.

d.international reporting standards differ from GAAP methods.

40.One objective of financial reporting is to provide information that is

a.helpful in assessing the amounts, timing, and uncertainty of future cash flows.

b.useful for competitors who need to assess economic activities.

c.a forecast of future operations.

d.unavailable to management.