Reference no: EM132478471

Question 1 - Which of the following is not disclosed or stated on the Income Statement?

Retained Earnings

Net Income

Diluted Earnings per Share

Income Tax

Question 2 - Which of the following correctly describes the process of accounting for a change in inventory costing method from FIFO to average cost?

This change should be applied to previous financial statements only if the effect is deemed to be large enough; otherwise, apply prospectively.

This change should be accounted for retrospectively by revising prior periods' financial statements.

This change should be accounted for prospectively; prior periods' financial statements do not need to be revised.

U.S. GAAP does not allow a change in inventory costing method.

Question 3 - Which of the following describes the appropriate manner for making a prior period adjustment to correct the income effects of the error?

Reverse the incorrect journal entry that was made to reflect the proper effects to revenues and expenses.

Increase/decrease Income Statement accounts at the end of period that the error is discovered.

Adjust related Balance Sheet accounts in order to correct effects on income.

Increase or decrease the balance of beginning retained earnings in the Statement of Shareholders' Equity.

Question 4 - Use the following information related to Company X's performance for the year 2016 to answer Questions 4-6.

Sales Revenue $1,000,000

Gross Profit $600,000

Operating Income $375,000

Income before Taxes $250,000

Net Income $150,000

Q4. What was Company X's cost of goods sold for 2016?

$400,000

$600,000

$625,000

$750,000

Question 5 - What were Company X's operating expenses for 2016?

$125,000

$225,000

$400,000

$750,000

Question 6 - What was the tax rate for Company X in 2016?

20%

25%

40%

85%

Question 7 - Company X sold one of its divisions at the end of 2016 for $10,000,000. The division had a book value of $9,500,000. For the year 2016, the division reported a pretax loss of $1,000,000. Company X's tax rate is 40%. What is Company X's loss on discontinued operations for 2016?

$100,000

$200,000

$300,000

$500,000

Question 8 - Which of the following is not an example of an asset that could become impaired?

Equipment

Building

Short-term investments

Goodwill

Question 9 - During 2018, Company X had net income of $150,000. At the beginning of the year, Company X had 200,000 shares of outstanding common stock. Company X issued 50,000 more shares on both April 1, 2018 and October 1, 2018. Company X did not pay any preferred stock dividends during 2018. What is Company X's basic earnings per share?

$0.50

$0.53

$0.56

$0.60