Question :
71. The _____ uses only sales revenues and net income and : 1245931
71. The _____ uses only sales revenues and net income and an analyst nearly always can calculate, regardless of format and display differences in income statement presentations.
A. acid test or quick ratio
B. current ratio
C. asset turnover ratio
D. profit margin percentage
E. revenue turnover ratio
72. Revenue recognition is among the most complex issues in financial reporting. The quantity and complexity of the authoritative guidance for recognizing revenues result(s) from
A. misreporting of revenues,
B. reporting revenues before the firm earns them,
C. reporting nonexistent revenues,
D. firms bundling products and services and selling them in multiple-element arrangements,
E. all of the above
73. The sum of net income and other comprehensive income is/are:
A. Comprehensive Net Income
B. Comprehensive Income
C. Comprehensive Retained Earnings
D. Net Income after comprehensive income items
E. none of the above
74. Both U.S. GAAP and IFRS require firms to report the cumulative effect of other comprehensive income in a balance sheet account called Accumulated
A. Comprehensive Income.
B. Net Comprehensive Income.
C. Other Comprehensive Income.
D. Comprehensive Net Income.
E. None of the above.
75. Both U.S. GAAP and IFRS require the presentation of an income statement and the presentation of the items of Other Comprehensive Income. U.S. GAAP permits the following reporting format(s) except for:
A. a single statement of comprehensive income that shows all the changes in net assets except from transactions with owners.
B. a two-statement presentation that includes an income statement and a separate statement of comprehensive income.
C. a separate display of the items comprising Other Comprehensive Income within a statement of changes in shareholders’ equity.
D. a separate display of the items comprising Other Comprehensive Income within a statement of retained earnings.
E. All of the above are acceptable reporting formats.
76. While no general principle describes the nature of items excluded from net income and included in Other Comprehensive Income, they tend to arise from remeasurements of assets and liabilities (often, remeasurements at fair value) and not from transactions. For example, IFRS permits but does not require firms to revalue certain noncurrent assets upward to reflect increases in fair value in excess of acquisition cost. Under IFRS, such a revaluation remeasurement increases assets (because the firm now records an existing asset on the balance sheet at a larger number) and increases Other Comprehensive Income. These increases are accumulated in a(n) _____ account, Revaluation Surplus.
A. liability
B. shareholders’ equity
C. revenue
D. asset
E. expense
77. Firms have considerable flexibility as to how they report other comprehensive income each period. Under U.S. GAAP, they can include
A. it with net income in a single statement of comprehensive income.
B. it in a separate statement of other comprehensive income that is one of the notes to the financial statements.
C. it in a statement of changes in shareholders’ equity.
D. all of the above.
E. none of the above.
78. Other comprehensive income for a reporting period include(s)
A. changes in the fair value of marketable equity securities available for sale.
B. changes in the fair value of derivatives used as cash flow hedges.
C. gains and losses related to retirement plans not yet recognized in measuring retirement benefits expense.
D. all of the above
E. none of the above
79. Which of the following is/are true concerning accumulated other comprehensive income?
A. Firms measure marketable equity securities classified as available for sale at fair value and record the unrealized changes in fair value as an element of other comprehensive income.
B. Firms remeasure derivatives designated as cash flow hedges to fair value at the end of each period and report the unrealized gain or loss in other comprehensive income.
C. Firms translate the reported results of their foreign operations from local currencies into U.S. dollars in order to prepare consolidated financial statements.
D. Firms must include gains and losses from changes in actuarial assumptions, actuarial performance, and prior service cost in other comprehensive income prior to their amortization as an adjustment to pension expense.
E. all of the above
80. Which of the following is/are not true concerning accumulated other comprehensive income?
A. Firms measure marketable equity securities classified as available for sale at fair value and record the unrealized changes in fair value as an element of other comprehensive income.
B. Firms remeasure derivatives designated as cash flow hedges to fair value at the end of each period and report the unrealized gain or loss in other comprehensive income.
C. Firms translate the reported results of their foreign operations from local currencies into U.S. dollars in order to prepare consolidated financial statements.
D. Firms must include gains and losses from changes in actuarial assumptions, actuarial performance, and prior service cost in other comprehensive income prior to their amortization as an adjustment to pension expense.
E. none of the above
