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9-1
Chapter 09 The Income Statement and the Statement of Cash Flows
Answer Key
Multiple Choice Questions
1.
The first caption in most income statements in annual reports is:
2.
Gains differ from revenues because gains:
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3.
Under most circumstances, in order to recognize revenue:
4.
The concept of matching revenue and expense refers to the fact that:
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5.
Most entities satisfy the accounting criteria for recognizing revenue when:
6.
Most entities satisfy the accounting criteria for recognizing an expense when:
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7.
The gross profit ratio is useful to the manager for each of the following purposes
except
that:
8.
Which of the following accounts/captions are not ever included in the calculation for Gross
Profit?
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9.
When the periodic inventory system is used:
10.
Income from operations is:
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11.
The earnings per share of common stock calculation:
12.
An item that cost $270 is sold for $360. The gross profit ratio for this item is:
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13.
An item that cost $120 is to be sold for a price that will yield a gross profit ratio of 20%.
The selling price should be:
14.
Recognition of revenue in accrual accounting requires:
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15.
The major difference between the indirect and the direct method of a statement of cash
flows appears in which of the following activities section(s)?
16.
Which of the following is an accurate statement regarding a statement of cash flows?
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17.
In the statement of cash flows, depreciation and amortization expense is added back to
net income because:
18.
In the statement of cash flows, an increase in the accounts receivable balance from the
beginning of the period to the end of the period would:
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19.
Revenue may be recognized:
20.
The term, "realization," in revenue recognition refers to which of the following?
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21.
The term, "earned," in revenue recognition refers to which of the following?
22.
Which of the following is
not
a principal category of "Other operating expenses" frequently
reported on the income statement?
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23.
Which of the following captions would be
not
be reported on a single step income
statement?
24.
Which of the following statements is
true
regarding the reporting of discontinued
operations?
