Goals Achievement: Chapter Fifteen
The utilization of a prior period adjustment is appropriate for:
Which of the following would precede the other on a detailed corporate income statement?
To report an event as an extraordinary item, how many of the criteria (unusual in nature and infrequent in occurrence) must be satisfied?
Continuing operations, discontinued operations, extraordinary items, and prior period adjustments should all be reported net of their related tax effect.
Changing from one generally accepted accounting method to another one should be accounted for via:
Earnings per share is a popular measure of corporate book value.
The calculation of earnings per share is based on:
Which of the following takes into account potential dilution from convertible securities?
Book value per share is the same as fair value per share.
When two classes of stock are outstanding, the book value per share computation involves dividing total stockholders' equity by the sum of the number of common and preferred shares outstanding.
The dividend payout ratio is calculated by dividing dividends per share by:
An objective of accounting information is to provide information that is useful in the decision-making process of both investors and creditors.
One specific objective of financial accounting is to provide information useful in assessing the amounts, timing, and uncertainty of an organization's:
Financial statements are generally regarded as:
Which characteristic of financial accounting pertains to the degree to which information bears on the decision-making process?
To be reliable, accounting information must display the characteristic of:
To be understandable, accounting information must be comprehensible to those who (1) have a reasonable understanding of business and economic activities and (2) are willing to study the information with reasonable diligence.
The establishment of generally accepted accounting principles means that all organizations record and measure financial activity in the same manner.
The private sector group responsible for the establishment of financial accounting rules is the:
A presumption that a business will continue to operate for an indefinite period of time unless there is substantial evidence to the contrary is the:
The revenue realization principle holds that expenses should be recognized in the same period as the revenues that they helped to produce.
The consistency principle is based on the idea that businesses should employ the same accounting practices in each reporting period to improve the:
The idea that corporations should expense the cost of small items of equipment relates to the concept of:
The Financial Accounting Standards Board currently requires all companies to report supplemental information on the effects of inflation.
To date, no attempt has been made to establish uniformity for international accounting standards.
If a foreign currency account payable is established in the accounts at $0.50 per unit, and the exchange rate subsequently changes to $0.60 per unit, then which of the following will result?
Exchange gains and losses should be recognized on the date of settlement of the foreign currency payable or receivable, and also: