ACCT 2130: Chapters 4-6

Most real-world income statements are presented using which format?

• Income Step

• Single-Step

• Multiple-Step

• Magnitude-Step

Revenue - Cost of Goods Sold =

• Gross Profit

• Net Income

• Operating Income

• Income before taxes

Using accruals to reduce the volatility of reported earnings over time is called

• Classification Shifting

• Restructuring

• Income Smoothing

• Adjustments

Arise from events that are not likely to recur in the foreseeable future.

• Temporary Earnings

• Operating Expenses

• Financing Activities

• Estimates

Severance pay for employee layoffs associated with facility closings would be classified as

• Income Smoothing

• Temporary Earnings

• Restructuring Costs

• Operating Income

The new standard is applied to all periods presented in the financial statements.

• Retrospective Approach

• Modified Retrospective Approach

• Prospective Approach

• Voluntary Approach

Which of the following would be accounted for using the prospective approach? Check all that apply.

• Change in Accounting Estimate

• Change in Inventory Method

• Change in Depreciation

• Accounting Errors

Which financial statements should changes over time? Check all that apply.

• Income Statement

• Cash Flow Statement

• Balance Sheet

• Statement of Shareholder's Equity

Which of the following are reported on statement of cash flows? Check all that apply.

• Operating Activities

• Purchasing Activities

• Investing Activities

• Financing Activities

The sale of equipment is an example of a(n)

• Operating Activity

• Financing Activity

• Investing Activity