31) Put an X in the appropriate box to identify each of the following as overstating, understating or not affecting earnings per share.
Overstating
Understating
Not affecting
a. Recording revenue expenditures as capital expenditures
b. Depreciating long-term assets over unusually short useful lives
c. Overstating the allowance for uncollectible accounts
d. Reporting a current asset as a long-term asset
e. Writing-off long-term assets even though the assets are not impaired
f. Overstating warranty payable
32) Put an X in the appropriate box to identify each of the following as overstating, understating or not affecting earnings per share.
a. Recording capital expenditures as expenses
b. Depreciating long-term assets over unusually long useful lives
c. Understating the allowance for uncollectible accounts
d. Reporting a long-term liability as a current liability
e. Understating warranty payable
33) What effect will purchasing treasury stock have on earnings per share? Is it ethical for management to repurchase the company's own shares?
34) The management of Krupt, Inc. decided to buy back 30% of the shares of stock outstanding. What effect would this have on the company's earnings per share? Why would management want to do this? Is this ethical?
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