31) Following U.S. Generally Accepted Accounting Principles, how is a change in accounting estimate handled?
A) The new estimate must be used in the current and future years only.
B) The new estimate must be used in the prior year financial statements only.
C) The new estimate must be used in the future years only.
D) The new estimate must be used in the prior, current and future years.
32) What is the CORRECT order to list line items on the income statement?
A) Extraordinary items, Discontinued operations, Other revenues and expenses
B) Discontinued operations, Extraordinary items, Other revenues and expenses
C) Other revenues and expenses, Discontinued operations, Extraordinary items
D) Other revenues and expenses, Extraordinary items, Discontinued operations
33) Assume it is the first year of operations. When taxable income exceeds pretax accounting income, accountants record a(n):
A) Deferred Tax Asset.
B) Deferred Tax Liability.
C) Income Tax Payable.
D) Prepaid Income Taxes.
34) The current market price per share is $32. Earnings per share for income from continuing operations is $10.00 per share. Earnings per share for net income is $5.00 per share. The investment capitalization rate is 10%. What is the estimated value of the stock per share?
A) $10.00
B) $50.00
C) $100.00
D) $320.00
35) The loss from discontinued operations includes:
A) operating loss of discontinued segment during divestiture period.
B) loss on sale of discontinued segment.
C) unusual and infrequent losses.
D) A and B.
36) When predicting a company's future income, financial analysts exclude:
A) gains or losses from discontinued operations.
B) extraordinary gains or losses.
C) accounting changes in accounting principle.
D) all of the above.
37) Which of the following is reported as Other Losses and Expenses on the income statement of a major retailer?
A) loss due to sale of a segment of a business
B) loss due to sale of a piece of equipment
C) loss due to takeover of a foreign segment by a foreign government
D) loss due to hurricane in Minnesota that destroyed a plant building
38) Under International Financial Reporting Standards, which line item or caption below is NOT used?
A) other losses and expenses
B) other gains and revenues
C) loss due to discontinued operations
D) extraordinary loss
39) For a retailer, how is Interest Expense classified on the income statement?
A) Operating Expenses
B) Extraordinary Expense
C) Income Tax Expense
D) Other Expenses and Losses
40) Which of the following line items are reported net of tax on the income statement?
A) operating loss of discontinued operations
B) loss on sale of discontinued segment
C) extraordinary loss due to flood damage in factory in Phoenix, Arizona
D) all of the above