Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Question
Chapter 5, Problem 5.2BE
To determine
To identify: The each given description is advantage or disadvantage of the income statement.
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Students have asked these similar questions
Which of the following statements is a usefulness of the income statement?
A.
Evaluate the past performance of the enterprise.
O B.
Income measurement involves judgment.
OC
Items that cannot be measured reliably are not reported.
O D.
Income numbers are affected by the accounting methods employed.
What is probably the greatest single reason conventional financial statements are inadequate for analysis?
a. Accrual accounting
b. Historical cost
c. Matching rule
d. Going concern concept
What is meant by comparability when discussing Qualitative Characteristicsof Useful Financial Information:a. Information has predictive or confirmatory value.b. Information is reasonably free from error.c. Information that is measured and reported in a similar fashion acrosscompanies.d. Information is timely.
Chapter 5 Solutions
Intermediate Accounting
Ch. 5 - What are the three limitations of the income...Ch. 5 - In what way is the income statement useful for...Ch. 5 - Prob. 5.3QCh. 5 - Prob. 5.4QCh. 5 - What management behavior does the term earnings...Ch. 5 - What is the difference between permanent and...Ch. 5 - Prob. 5.7QCh. 5 - Prob. 5.8QCh. 5 - Prob. 5.9QCh. 5 - Prob. 5.10Q
Ch. 5 - What are the six key items to be reported on the...Ch. 5 - Explain why operating income is an important...Ch. 5 - Prob. 5.13QCh. 5 - Prob. 5.14QCh. 5 - What items are included in net income?Ch. 5 - Are items of other comprehensive income included...Ch. 5 - What two choices must companies make when...Ch. 5 - Prob. 5.18QCh. 5 - Prob. 5.19QCh. 5 - Are companies reporting under U.S. GAAP required...Ch. 5 - What accounts are summarized on the statement of...Ch. 5 - What is financial statement analysis?Ch. 5 - Prob. 5.23QCh. 5 - What are comparative financial statements and why...Ch. 5 - What is the difference between vertical and...Ch. 5 - Prob. 5.26QCh. 5 - Explain the difference between return on equity...Ch. 5 - How is a companys profit margin calculated?Ch. 5 - Prob. 5.1MCCh. 5 - Moore Furniture Inc., a public company, has...Ch. 5 - Beach and Poole, CPA is reviewing income statement...Ch. 5 - Prob. 5.4MCCh. 5 - Allison Corporations current year income from...Ch. 5 - Prob. 5.6MCCh. 5 - Chili Co. had the following balances at December...Ch. 5 - Szuba Corporation reported the following...Ch. 5 - Prob. 5.9MCCh. 5 - Prob. 5.1BECh. 5 - Prob. 5.2BECh. 5 - Advantages and Disadvantages of the Income...Ch. 5 - Identify each of the earnings items as primarily...Ch. 5 - Income Statement Presentation. Place the...Ch. 5 - Statement of Net Income Presentation, IFRS. Which...Ch. 5 - Single-Step Statement of Net Income. Carr...Ch. 5 - Statement of Net Income, IFRS. Using the...Ch. 5 - Multiple-Step Statement of Net Income. Using the...Ch. 5 - Condensed Statement of Net Income. Using the...Ch. 5 - Prob. 5.11BECh. 5 - Prob. 5.12BECh. 5 - Discontinued Operations. Jojo, Inc. held a...Ch. 5 - Prob. 5.14BECh. 5 - Prob. 5.15BECh. 5 - Prob. 5.16BECh. 5 - Computation of Retained Earnings. Taxi Cabs, Inc...Ch. 5 - Computation of Contributed Capital. Using the...Ch. 5 - Prob. 5.19BECh. 5 - Prob. 5.20BECh. 5 - Prob. 5.21BECh. 5 - Ratio Analyses. Green Grasshopper Incorporated is...Ch. 5 - Multiple-Step and Single-Step Statements of Net...Ch. 5 - Condensed Statement of Net Income. Using the trial...Ch. 5 - Prob. 5.3ECh. 5 - Prob. 5.4ECh. 5 - Multiple-step Statement of Net Income. The current...Ch. 5 - Condensed Statement of Net Income. Using the...Ch. 5 - Multiple-step income Statement. Ciara s Cookie...Ch. 5 - Prob. 5.8ECh. 5 - Prepare Statement of Stockholders' Equity. Dane...Ch. 5 - Prepare Statement of Stockholders Equity. Ciaras...Ch. 5 - Prepare a Statement of Stockholders' Equity....Ch. 5 - Profitability Analyses. Use the following excerpt...Ch. 5 - Multiple-Step and Single-Step income Statement,...Ch. 5 - Condensed Income Statement. Using the information...Ch. 5 - Multiple-step, Single-step, and Condensed...Ch. 5 - Statement of Net Income Presentation. IFRS....Ch. 5 - Income Statement Presentation, Classification, and...Ch. 5 - Prob. 5.6PCh. 5 - Multiple-step, Single-step, and Condensed...Ch. 5 - Statement of Comprehensive Income Single-and...Ch. 5 - Prepare Statement of Stockholders Equity. Use the...Ch. 5 - Prob. 5.10PCh. 5 - Prob. 1JCCh. 5 - Prob. 1FSCCh. 5 - Prob. 2FSCCh. 5 - Prob. 1SSCCh. 5 - Surfing the Standards Case 2: Amounts Paid by...Ch. 5 - Prob. 1BCCCh. 5 - Prob. 2BCC
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Similar questions
- The primary purpose of showing special types of eventsseparately in the income statement is to:a. Increase earnings per share.b. Assist users of the income statement in evaluating theprofitability of normal, ongoing operations. c. Minimize the income taxes paid on the results of ongo-ing operations. d. Prevent unusual losses from recurring.arrow_forwardCost is a pervasive constraint on the information that can be provided by financial reporting. Reporting financial information imposes costs, and it is important that those costs are justified by the benefits of reporting that information. b. Describe any THREE (3) costs each incurred by the providers and users of the information. c. Applying a measurement basis to an asset or liability creates a measure for that asset or liability and for the related income and expenses. List the measurement basis as suggested by the revised Conceptual Framework.arrow_forwardWhich characteristic is applicable to financial statements when provision is made for all known expenses and losses, whether the amount is known for certain or just an estimate? O A. Completeness OB/Reliability O/C. Relevance OD. Prudencearrow_forward
- When making judgements lower profits and asset values are estimated rather than higher values. Which accounting concept does this describearrow_forwardListed below are several information characteristics and accounting principles and assumptions. Match the letter of each with the appropriate phrase that states its application. (Items a through k may be used more than once or not at all.) Economic entity assumption g. Matching principle Going concern assumption h. Full disclosure principle Monetary unit assumption i. Relevance characteristic Periodicity assumption j. Reliability characteristic Historical cost principle k. Consistency characteristic Revenue recognition principle ____ 1. Stable-dollar assumption (do not use historical cost principle). ____ 2. Earning process completed and realized or realizable. ____ 3. Presentation of error-free information with representational faithfulness. ____ 4. Yearly financial reports. ____ 5. Accruals and deferrals in the adjusting and closing process. (Do not use going concern.) ____ 6. Useful standard measuring unit for business…arrow_forwardWhich of the following statements about accounting income and economic income is (are) correct? I. Accounting income ignores many unrealized gains/losses of assets and liabilities, but economic income fully recognizes unrealized gains/losses. II. Accounting income does not consider all the costs (e.g., opportunity costs), whereas economic income account for all types of costs. III. Income and capital gains/losses are treated different in the calculation of accounting income, while they are treated the same in the calculation of economic income. Group of answer choices a.I and II b. I and III c. II and III d. I, II and IIIarrow_forward
- Which of the following is considered a constraint on useful information by Statement of Financial Accounting Concepts No. 8? a. benefits costs b. conservatism c. timeliness d. verifiabilityarrow_forwardDetermine the effect of the following errors on a companys total revenue, total expenses, and net income. Indicate the effect by writing O for Overstated (too much), U for Understated (too little), or NA for Not Affected.arrow_forwardWhich of the following statements is false regarding planning analytical procedures in the revenue cycle? a. As revenue is typically regarded as a high-risk account, planning analytical procedures related to revenue are not required. b. The first step in planning analytical procedures includes developing an expectation of recorded amounts or ratios, and evaluating whether that expectation is precise enough to accomplish the relevant objective. c. Trend analysis would not be appropriate as a plan-fling analytical procedure in the revenue cycle. d. All of the above statements are false.arrow_forward
- Multiple choice 1. A change in measurement basis is most likely a. change in accounting policy. c. error. b. change in accounting estimate. d. any of these 2. A correction of prior period error is accounted for by a. retrospective application. b. retrospective restatement. c. prospective application. d. impracticable application. 3. Which of the following is a change in accounting estimate? a. Change from the cost model to the fair value model of measuring investment property. b. Change in business model for classifying financial assets resulting to the reclassification of a financial asset from being measured at amortized cost to fair value. c. Change in the method of recognizing revenue from long term construction contracts. d. Change in the depreciation method, useful life or residual value of an item of property, plant and equipment. 4. These result from new information or new developments. a. Changes in accounting estimates b. Changes in accounting policies C.…arrow_forwardUnder Qualitative Characteristics of Useful Financial Information, which ofthe following is a qualitative characteristic associated with faithfulrepresentation:a. Completenessb. Free from errorc. Neutralityd. All the abovearrow_forwardDetermine the effect of the following errors on a company's total revenue, total expenses, and net income. Indicate the effect by selecting Overstated (too much), Understated (too little),or Not Affected.-----See the image for the questionarrow_forward
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