Which of the following statements is/are FALSE: 1. Because of the prudence convention, inventories are expensed in the income statement as cost of goods sold when they are sold, and not when they are bought in by the business and paid for. II. Investment property does not get depreciated, unless it is measured at cost. III. In the statement of comprehensive income, costs can be analysed according to function or nature. Costs analysed according to function are classified into the following categories; distribution & selling costs; administrative expenses; other operating expenses (or income). IV. A complete set of financial statements consists of the statement of financial position, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows. V. Following the acquisition of an item of property, plant and equipment, subsequent expenditure for this item that will extend the asset's useful life and increase the asset's capacity is capitalised. Select one: Oa 1, 11, IV Ob IV and V Oc 1 and 11 Od. II and II Oe. 1, 11, V

Which of the following costs would not be included in accounting financial statements? O A. opportunity costs O B. sunk costs O C. historical costs O D. All of the above would be included in accounting financial statements

Which is the true statement?   The CVP income statement shows contribution margin instead of gross profit. In a CVP income statement, costs and expenses are classified only by function. In a traditional income statement, costs and expenses are classified as either variable or fixed. The CVP income statement is prepared for both internal and external use.

A traditional income statement classifies costs by function; costs are classified as either product costs or period costs

Which of the following represents the components of the income statement for a service business Sales Revenue - Cost of Goods Sold = gross profit Service Revenue - Operating Expenses = operating income Sales Revenue - Cost of Goods Manufactured = gross profit Service Revenue - Cost of Goods Purchased = gross profit

A multi-step income statement ________. A. separates cost of goods sold from operating expenses B. considers interest revenue an operating activity C. is another name for a simple income statement D. combines cost of goods sold and operating expenses

Explain the meaning of (A) differential revenue, (B) differential cost, and (C) differential profit (loss).

Using the information from BDS Enterprises, prepare the income statement to include all costs, but separate out uncontrollable costs. Insert subtotals where appropriate (include one for operating income) before the uncontrollable costs. Income tax expense should be based on all expenses (that is, it will be the same amount as in question 1). Calculate net income, profit margin, ROI, and RI, excluding uncontrollable expenses. Prepare a short response to accompany the income statement that explains why uncontrollable costs are separated in the income statement.

If a company capitalizes costs that should be expensed, how is its income statement for the current period impacted? A. Assets understated B. Net Income understated C. Expenses understated D. Revenues understated

A simple income statement ________. A. combines all revenues into one category B. does not combine all expenses into one category C. separates cost of goods sold from operating expenses D. separates revenues into several categories