Intermediate Accounting Test 2 Exam Questions With 100% Correct Answers

Intermediate Accounting Test 2 Exam Questions With 100% Correct Answers The difference between single-step and multiple-step income statements is primarily an issue of: - answerPresentation Managers may engage in classification shifting by: - answerreporting operating expenses as nonoperating expenses to inflate reported operating income. A primary advantage of the multiple-step format of the income statement over the single-step format is that the multiple-step format: - answerclassifies expenses by function Earnings quality refers to - answerthe ability of reported earnings to predict a company's future earnings Prospective - answerChanges in estimates are accounted for using this approach Characteristics of temporary earnings are best characterized as - answerearnings that arise from events that are not likely to recur in the foreseeable future. Income from continuing operations - answerhow financial statement users typically begin their assessment of permanent earnings Nonowner transactions - answercomprehensive income is the change in equity from... Income smoothing refers to: - answerthe ability of management to use accruals to reduce the volatility of reported earnings over time. Non-GAAP Earnings: - answercould be considered management's view of permanent earnings. Restructuring costs - answercosts associated with management's plans to materially change the scope of business operations or the manner n which they are conducted. Multiple-Step Income Statement - answermost real-world income statements are presented using this format. An example of fruad - answerknowingly classifying a material long-term receivable as current receivable.