Question : 171. U.S. GAAP and IFRS require firms to account for correction : 1230398

171. U.S. GAAP and IFRS require firms to account for correction of errors, if material, by  
A. restating net income of prior periods and adjusting the beginning balance in Retained Earnings for the current period
B. restating net income of prior periods and adjusting the ending balance in Retained Earnings for the current period
C. restating net income of the current period and adjusting the beginning balance in Retained Earnings for the current period
D. restating net income of the current period and adjusting the ending balance in Retained Earnings for the current period
E. restating net income of the current period, only.

172. Accrual accounting requires frequent, ongoing changes in estimates. Which of the following is/are true? 
A. As time passes and conditions change, new information becomes available that causes management to change the estimates required to apply accounting principles.
B. Firms do not recalculate revenues and expenses of previous periods to incorporate new information involving estimates.
C. Changes in estimates do not always relate to recurring accrual accounting measurements.
D. Examples of changes in estimates include the amount of uncollectible accounts and the useful lives of depreciable assets.
E. all of the above

173. Accrual accounting requires frequent, ongoing changes in estimates. Which of the following is/are not true? 
A. As time passes and conditions change, new information becomes available that causes management to change the estimates required to apply accounting principles.
B. Firms do not recalculate revenues and expenses of previous periods to incorporate new information involving estimates.
C. Changes in estimates do not always relate to recurring accrual accounting measurements.
D. Examples of changes in estimates include the amount of uncollectible accounts and the useful lives of depreciable assets.
E. Firms report the income effect of these items in the retained earnings as a direct adjustment.

174. A separate section of the income statement reporting information about discontinued operations is included 
A. only if the sale resulted in a loss
B. in every income statement prepared in accordance with the GAAP
C. any time a major business asset is sold
D. if a firm sells, during the period, or plans to sell, during the next period, a major division or segment of its business
E. if a firm has sold during the previous period, or plans to sell during the next period, a major division or segment of its business

175. Correction of a material error occurring in prior periods is reported as 
A. an adjustment of earnings of the current period, only
B. a retroactive restatement of prior years earnings, only
C. a retroactive restatement of prior years earnings and an adjustment to the beginning balance of retained earnings for the current period
D. an adjustment of earnings of the current and future periods
E. an adjustment of earnings of the current period, and an adjustment to the ending balance of retained earnings for the current period

176. Extraordinary gains and losses is a separate section of the income statement and for an item to be classified as extraordinary it must be material in amount and 
A. unusual in nature, only
B. infrequent in occurrence, only
C. both unusual in nature and infrequent in occurrence
D. either unusual in nature or infrequent in occurrence
E. either usual in nature or frequent in occurrence

177. An extraordinary item should be reported separately on the statement of income as a component of income 
A. net of income tax and before income from discontinued operations
B. net of income tax and after income from discontinued operations
C. net of income tax and from continuing operations after income taxes
D. from continuing operations before income taxes
E. from a change in estimate before income taxes

178. Publicly held firms that apply U.S. GAAP or IFRS must show earnings per common share data in the  
A. body of the income statement.
B. footnotes to the financial statements.
C. management discussion and analysis.
D. body of the balance sheet.
E. body of the statement of cash flows.

179. Earnings per common share result from dividing net income  
A. minus preferred stock dividends by the weighted-average number of outstanding common shares during the accounting period.
B. by the weighted-average number of outstanding common shares during the accounting period.
C. minus common stock dividends by the end-of-year number of outstanding common shares.
D. minus preferred stock dividends by the end-of-year number of outstanding common shares.
E. by the end-of-year number of outstanding common shares.

180. Publicly held firms that apply U.S. GAAP or IFRS must show earnings per common share data.  Firms reporting multiple categories of income items must disclose earnings per common share  
A. in the body of the statement of cash flows.
B. in the body of the balance sheet.
C. for the total, only.
D. for each reported category.
E. in the footnotes to the financial statements.