Question : 105.A prior period adjustment a correction made to: A. Retained earnings of : 1259475

 

 

105.A prior period adjustment is a correction made to:   

A. Retained earnings of the beginning of the period.

 

B. Retained earnings at the end of the period.

 

C. Net income of the current year.

 

D. Only to last years’ financial statements.

 

 

 

 

106.If a material accounting error was made in a prior year, that error:   

A. Should be reflected on the current year’s income statement.

 

B. Should be reflected, net of taxes, on the retained earnings statement.

 

C. Should be reflected as a change in accounting principle.

 

D. Should be considered as an extraordinary item, and shown, net of taxes, on the income statement.

 

 

 

 

107.Which of the following would be treated as a prior period adjustment by Gold Corporation in 2015?   

A. In 2015, it was discovered that Gold Corporation recorded the purchase of a warehouse in 2012 as a debit to Repairs Expense.

 

B. In 2015, Gold Corporation switched from the straight-line method of depreciation to another method of computing depreciation.

 

C. In 2015, Gold Corporation’s management decided that the estimated useful life of its computer equipment should be changed from five years to nine years.

 

D. In 2015, Gold Corporation sold a segment of the business that it has operated since 2006.

 

 

 

 

108.A prior period adjustment appears in:   

A. The income statement following the subtotal “Income before Prior Period Adjustments.”

 

B. The statement of retained earnings, as an adjustment to the ending balance of retained earnings.

 

C. Footnotes to the financial statements.

 

D. The statement of retained earnings, as an adjustment to the beginning balance of retained earnings.

 

 

 

 

109.After preparing the financial statements for 2015, the accountant for the Dawson Corporation discovered that a prior period adjustment had been omitted from the 2013 financial statements. Which of the following is most likely to require correction as a result of this oversight?   

A. Earnings per share as originally computed.

 

B. Net income for 2015 as originally reported.

 

C. Ending retained earnings at December 31, 2015.

 

D. Extraordinary items as originally reported.

 

 

 

 

110.A prior period adjustment appears in the financial statements of the current year when:   

A. An error was made in computing the net income of the current period.

 

B. An error was made in measuring the net income of a previous year or years.

 

C. An extraordinary loss in a prior year was included among normal results of operations in the prior year.

 

D. Earnings per share figures from prior years are restated to reflect the increased number of shares outstanding due to a stock split or a stock dividend.

 

 

 

 

111.Comprehensive income can be displayed to users of financial statements in which of the following way(s):   

A. Only as a second income statement.

 

B. As a single income statement that includes both the components of net income and the components of other comprehensive income.

 

C. As a footnote disclosure to the financial statements.

 

D. Either as a second income statement or as a single income statement that includes both the components of net income and the components of other comprehensive income.

 

 

 

 

112.Which of the following items would be included in comprehensive income but not reported as a component of net income?   

A. A lower-of-cost-or-market write-down of inventory.

 

B. A material loss due to natural disaster.

 

C. An unrealized gain on the portfolio of available-for-sale marketable securities.

 

D. A gain on the sale of a segment of the business.

 

 

 

 

113.Treasury stock appears as:   

A. An asset account.

 

B. A liability account.

 

C. An expense account.

 

D. An equity account.

 

 

 

 

114.The statement of stockholders’ equity:   

A. Is a required financial statement.

 

B. May be issued as a substitute for the statement of retained earnings.

 

C. Shows the changes during the year in all stockholders’ equity accounts except retained earnings.

 

D. Is a statement sent to each stockholder showing that person’s return on equity.

 

 

115.A statement of stockholders’ equity discloses each of the following except:   

A. The market value of the stockholders’ equity at the end of the year.

 

B. The cost of treasury stock owned at the end of the year.

 

C. Net income for the current year.

 

D. The amount of cash dividends declared during the current year.