Question : 61.Richard’s Sporting Goods reports net income of $100,000, net sales : 1236083

61.Richard’s Sporting Goods reports net income of $100,000, net sales of $500,000, and average assets of $1,000,000. The asset turnover is:
A.0.1 times.
B.0.5 times.
C.2 times.
D.5 times.

62.The sale or disposal of a significant component of a company’s operations is referred to as:
A.A discontinued operation.
B.An extraordinary item.
C.Other revenues and expenses.
D.Gain or loss on sale of assets.

63.A discontinued operation refers to:
A.The sale or disposal of a significant component of a company’s operations.
B.Discontinued inventory items.
C.Inventory items that have been completed and sold.
D.The sale of most long-term assets.

64.An extraordinary item must meet which of the following criteria?
A.Unusual in nature.
B.Infrequent in occurrence.
C.Unusual in nature and infrequent in occurrence.
D.Unusual in nature or infrequent in occurrence.

65.Extraordinary items:
A.Include very large gains or losses from ordinary business activities.
B.Are items that are both unusual in nature and occur infrequently.
C.Are shown on the income statement before the tax effect.
D.Include the write-down of obsolete inventories.

66.Which of the following items is most likely to be reported as an extraordinary loss?
A.Losses due to the write-down of inventory.
B.Losses on the sale of long-term assets.
C.Losses due to business restructuring.
D.Uninsured losses from a natural disaster.

67.What is the correct order to present the following items on the income statement?
A.Other revenues and expenses, income tax expense, discontinued operations, extraordinary items.
B.Other revenues and expenses, income tax expense, extraordinary items, discontinued operations.
C.Discontinued operations, extraordinary items, other revenues and expenses, income tax expense.
D.Discontinued operations, extraordinary items, income tax expense, other revenues and expenses.

68.Popson Inc. incurred a material loss which was not unusual in character, but was clearly an infrequent occurrence. This loss should be reported as:
A.An extraordinary loss.
B.A loss from discontinued operations.
C.Other revenues and expenses.
D.A separate line item in retained earnings.

69.The financial statements of a firm that uses more aggressive accounting practices would be likely to report:
A.Higher profitability.
B.Higher dividends.
C.Higher liabilities.
D.Fewer total assets.

70.Which of the following is NOT an example of applying conservatism in accounting?
A.Recording contingent losses that are probable.
B.Expensing all research and development costs are they are incurred.
C.Using the lower-of-cost-or-market rules for inventory accounting.
D.Increasing the useful life used in calculating depreciation.

71.Which of the following is a conservative accounting practice?
A.The use of a longer service life for depreciation.
B.Waiting to record a litigation loss.
C.Adjust the allowance for uncollectible accounts to a smaller amount.
D.The write-down of overvalued inventory.

72.Which of the following is an aggressive accounting practice?
A.The use of a shorter service life for depreciation.
B.Waiting to record a litigation loss.
C.Adjust the allowance for uncollectible accounts to a larger amount.
D.The write-down of overvalued inventory.

73.Which of the following is a conservative accounting practice?
A.Change from double-declining balance to straight-line depreciation.
B.Record sales revenue before it is actually earned.
C.Adjust the allowance for uncollectible accounts to a larger amount.
D.Record inventory at market rather than lower of cost or market.

74.Which of the following is an aggressive accounting practice?
A.Change from straight-line to double-declining balance depreciation.
B.Record sales revenue before it is actually earned.
C.Adjust the allowance for uncollectible accounts to a larger amount.
D.Record inventory at lower of cost or market rather than at cost.