Question

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 a. as a prior period adjustment. b. in “other revenues and gains” or “other expenses and losses”. c. as an amount after continuing operations. d. as sales revenue or operating expense. Which of the following is included in comprehensive income? a. Investments by owners. b. Unrealized gains on available-for-sale debt securities. c. Distributions to owners. d. Changes in accounting principles. Which of the following is not a limitation of the balance sheet? a. Many items that are of financial value are omitted. b. Judgments and estimates are used. c. Current fair value is not reported. d. The data presented can be difficult for many users of the balance sheet to interpret. Which implies that the benefits of presenting financial information should outweigh the associated expenses of producing that information? a. Cost constraint b. Economic entity assumption c. Historical cost principle d. Fair value principle What is the characteristic that describes the size of a financial item that is capable of making a difference in a decision? a. Confirmatory Value b. Materiality c. Timeliness d. Predictive Value

Answer 1

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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

C. as an amount after continuing operations.

Which of the following is included in comprehensive income?

B. Unrealized gains on available-for-sale debt securities.

Which of the following is not a limitation of the balance sheet?

B. Judgments and estimates are used.

Which implies that the benefits of presenting financial information should outweigh the associated expenses of producing that information?

A. Cost constraint.

What is the characteristic that describes the size of a financial item that is capable of making a difference in a decision?

A. Confirmatory Value B. Materiality D. Predictive Value.