Short Essay Questions 1.Identify types of transactions that are considered exchanges of liabilities and shareholders' equity. Why are these transactions considered ‘financing’? 2.How do items at...

Short Essay Questions

1.Identify types of transactions that are considered exchanges of liabilities and shareholders' equity. Why are these transactions considered ‘financing’?

2.How do items at the top of the income statement differ from items at the bottom of the income statement?

3.How are operating transactions that are not based primarily on the normal operations of a company reported on the financial statements?

4.One of the three objectives of financial reporting directly relates to the income statement and measure of income. Indicate the context of this objective, and explain how it relates to the earnings process.