16) Which of the following assets is written up or down to fair value (current market value) at the end of each accounting period? a) Available for sale securities b) Patent c) Equipment a More than one of the above is recorded at fair value. 17) When recording depreciation, which of the following statements is true? a) Total assets increase and stockholder's equity increases b) Total assets decrease and stockholder's equity decreases c) Total assets increase and stockholders' equity decreases Total assets decrease and stockholder's equity increases 18) The gain resulting from a company selling off a component of its business (i.e, division or product line) is reported on the income statement as: a) An extraordinary item c) d) Discontinued operations A prior period adjustment As Other Revenues and Gains 19) Which of the following statements is true? Earnings per share: a) Is NOT a required disclosure on the face of the income statement Is the most frequently quoted measure of firm performance c) d) is the amount of Cash each stockholder will receive as dividends that period Reflects the amount of a company's earnings that belong to both common and preferred stockholders, on a per share basis 20) Advance Systems had 840,000 shares of common stock outstanding on January 1, 2010, and repurchased 75,000 shares on June 1, 2010. Net income for the year ended December 31, 2010 was $2,662,625 and preferred stock dividends for the year amounted to $35,000. When calculating EPS, what is the weighted average number of common shares outstanding during the year? a) 802,500 b) 840,000 c) 765,000 d) 796,250 All product and period costs are included in COGS a) b) c) d) Only costs that vary per unit are included in COGS Only direct material costs are included in COGS All product costs (fixed and variable) are included in COGS 22) In times when inventory levels are increasing, which of the following income statements will report the highest net income? a) Throughput Income Statements b) Variable Costing Income Statements c) Multiple Step Income Statements d) None of the above. All three types of income statements report the same amount of profit 41 Page