Questions For Review of Key Topics 04-1 The income statement is a change statement. Explain what is meant by this. 4-2 What transactions are included in income from continuing operations? Briefly explain why it is important to segregate income from continuing operations from other transactions affecting net income. Q4-3 Distinguish between operating and nonoperating income in relation to the income statement Q4-4 Briefly explain the difference between the single-step and multiple-step income statement form 04-5 Explain what is meant by the term earnings quality Q4-6 Wh at are restructuring costs and where are they reported in the income statement? 94-7 Define intraperiod tax allocation. Why is the process necessary? 4-8 How are discontinued operations reported in the income statement? 94-9 What is meant by a change in accounting principle? Describe the possible accounting treatments for a mandated change in accounting principle. 10 Accountants very often are required to make estimates, and very often those estimates prove inccrrect. In what period(s) is the effect of a change in an accounting estimate reported? T e correction of a material error discovered in a year subsequent to the year the error was made s considered a prior period adjustment. Briefly describe the accounting treatment for prior period adjustments 4-11 04-12 Define earnings per share (EPS). For which income statement items must EPS be disclosed Q 4-14 Describe the purpose of the statement of cash flows Q 4-16 Q 4-17 Distinguish between the direct method and the indirect metnod for reporting the results of operating activities in Q 4-13 Define comprehensive income. What are the two ways companies can present comprehensive incoe? O 4-15 Identify and briefly describe the three categories of cash flows reported in the statement of cash flow: Explain what is meant by noncash investing and financing activities pertaining to the statement of cash flows, Give an example of one of these activitics. the statement of cash flows. oFASB ASC 270-10-50: Interim Reporting-Overall-Disclosure (previously "Interim Financial Reporting." Accounting Principles Board Opinion No 28 (New York: AICPA. 1973))