Which of the following is not a component of income from


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Which of the following is not a component of income from operations? a. Extraordinary losses b. Write-downs of assets c. Restructurings d. Costs and expenses ____ 2. The write-down of an asset will affect a. total assets, but not net income. b. both total assets and net income. c. net income, but not total assets. d. neither total assets nor net income. ____ 3. The quality of a company’s earnings may be affected by the a. accounting methods the company uses. b. choice of independent auditors. c. industry in which the company operates. d. countries in which the company operates. ____ 4. When alternative acceptable accounting methods exist, a better quality of earnings generally is produced from selecting an accounting method that has the effect of reporting the a. lowest amount of future earnings. b. greatest amount of assets currently. c. greatest amount of retained earnings currently. d. lowest amount of current earnings. ____ 5. The consistency convention requires that a. the selection of a company’s accounting policies be disclosed in its financial statements. b. a company use the same accounting procedures year after year. c. a company use the same independent auditors year after year. d. all companies operating in the same industry use the same accounting methods. ____ 6. Which of the following is analyzed when a financial statement reader is looking at the nature of nonoperating items? a. Discontinued operations b. Interest expense c. Cost of goods sold d. Interest revenue ____ 7. The existence of which of the following income statement items will reduce the quality of the bottom-line figure? a. Advertising expense b. Extraordinary gain c. Revenues from services d. Cost of goods sold ____ 8. The quality of earnings will be affected by which of the following? a. Choice of inventory method b. Estimation of building’s useful life c. Discontinued operations d. All of these choices ____ 9. Net income does not include a. foreign currency translation adjustments. b. income taxes expense. c. discontinued operations. d. extraordinary gains and losses. ____ 10. A corporate income statement does not contain a. extraordinary gains and losses. b. discontinued operations. c. earnings per share data. d. unrealized investment gains and losses. ____ 11. Which of the following income statement amounts probably would be the best predictor of a corporation’s future performance? a. Net income b. Income before extraordinary items c. Income from continuing operations d. Total revenues ____ 12. On a corporate income statement, income from continuing operations a. will equal net income. b. will be less than net income. c. can equal, exceed, or be less than net income. d. will exceed net income. ____ 13. Which of the following items appears on the corporate income statement before Income from Continuing Operations? a. Income taxes expense b. Income from operations of discontinued segment c. Loss on disposal of segment d. Extraordinary gain ____ 14. Which of the following items should be classified as an extraordinary item on a corporate income statement? a. Loss due to discontinued operations b. Excess of the selling price over the cost of treasury stock c. Gain on the sale of a long-term investment d. Loss due to takeover of property by a foreign government ____ 15. A loss due to discontinued operations should be reported on the income statement a. before extraordinary items. b. before income taxes expense. c. after extraordinary items. d. after net income. ____ 16. Which of the following items would appear on the income statement below the others listed? a. Income taxes expense b. Restructurings c. Extraordinary gains and losses d. Discontinued operations ____ 17. Which of the following would have the least likelihood of being treated as an extraordinary item? a. Gain or loss on sale of equipment b. Uninsured loss from fire c. Uninsured loss from earthquake d. Gain or loss arising from enactment of new law ____ 18. For an item to b…

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