Accounting Final Essay Example

1.) The major elements of an income statement are: revenues, expenses, gains, and losses. 2.) Limitations of the income statement include all of the following except: helps assess the risk or uncertainty of achieving future cash flow. 3.) Which of the following is an example of managing earnings down: changing estimated bad debts from 3% to 4.5% of sales. 4.) What might a manager do during the last quarter of a fiscal year if she wanted to decrease current annual net income: delay shipments to customers until after the end of the fiscal year. 5.) Which of the following is not a selling expense: utilities expense. 6.) Classification as an extraordinary item on the income statement would be appropriate for the: none of these. 7.) Which of these is generally an example of an extraordinary item: devastating floods never experienced before in Nashville, TN. 8.) Under which of the following conditions would material flood damage be considered an extraordinary item for financial reporting purposes: only if floods in the geographical area are unusual in nature and occur infrequently. 9.) When a company discontinues an operation and disposes of the discontinued operation the transaction should be included in the income statement as a gain or loss on disposal reported as: an amount after continuing operations and before extraordinary items. 10.) A material item which is unusual in nature or infrequent in occurrence, but not both should be shown in the income statement: not net of tax and disclosed separately. 11.) Which of the following items would be reported net of tax on the face of the income statement: discontinued operations. 12.) Sandstrom Corporation has an extraordinary loss of 50,000 an unusual gain of 35,000 and a tax rate of 40%. At what amount would Sandstrom report each item: 30,000, 35,000. 13.) Interest on principal only is called: simple interest. 14.) An adjustment for wages expense, earned but unpaid at