1.The single-step income statement emphasizes

a.

the gross profit figure.

b.

total revenues and total expenses.

c.

extraordinary items and accounting changes more than these are emphasized in the multiple-step income statement.

d.

the various components of income from continuing operations.

2.How should an unusual event not meeting the criteria for an extraordinary item be disclosed in the financial statements?

a.

Shown as a separate item in operating revenues or expenses if material and supplemented by a footnote if deemed appropriate.

b.

Shown in operating revenues or expenses if material but not shown as a separate item.

c.

Shown net of income tax after ordinary net earnings but before extraordinary items.

d.

Shown net of income tax after extraordinary items but before net earnings.

3.Which of the following is true about intraperiod tax allocation?

a.

It arises because certain revenue and expense items appear in the income statement either before or after they are included in the tax return.

b.

It is required for extraordinary items and cumulative effect of accounting changes but not for prior period adjustments.

c.

Its purpose is to allocate income tax expense evenly over a number of accounting periods.

d.

Its purpose is to relate the income tax expense to the items which affect the amount of tax.

4.Which of the following earnings per share figures must be disclosed on the face of the income statement?

a.

EPS for income before taxes.

b.

The effect on EPS from unusual items.

c.

EPS for gross profit.

d.

EPS for income from continuing operations.

5.Comprehensive income includes all of the following except

a.

dividend revenue.

b.

losses on disposal of assets.

c.

investments by owners.

d.

unrealized holding gains.