Test Bank Financial Accounting 12th Edition By Jerry Weygandt, Paul Kimmel, Jill Mitchell

Test Bank for Financial
Accounting 12th Edition By
Jerry Weygandt, Paul Kimmel,
Jill Mitchell (All Chapters 1-
13, 100% Original Verified, A+
Grade)
All Chapters Arranged Reverse: 13-1

This is The Only Original and
Complete Test Bank for 12 th

Edition, All Other Files in the
Market are Fake/Old/Wrong
Edition.

,Financial Accounting, 12e (Weygandt)
Chapter 13 Financial Analysis: The Big Picture

1) Analysts are interested in sustainable income, which is equal to the past year's net income.
Answer: FALSE
Diff: 1
LO: 1, Section 1
Bloom / IFRS: K
AACSB / IMA: None; Performance Measurement
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min: 1

2) One objective of the income statement is to separate the results of continuing operations from
those of discontinued operations.
Answer: TRUE
Diff: 1
LO: 1, Section 1
Bloom / IFRS: K
AACSB / IMA: None; Reporting
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min: 1

3) When the disposal of a significant segment occurs, the income statement should report both
income from continuing operations and income (loss) from discontinued operations.
Answer: TRUE
Diff: 1
LO: 1, Section 1
Bloom / IFRS: K
AACSB / IMA: None; Reporting
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min: 1

4) Other comprehensive income includes all changes in stockholders' equity during a period
including those changes resulting from investments by stockholders'.
Answer: FALSE
Diff: 1
LO: 1, Section 1
Bloom / IFRS: K
AACSB / IMA: None; Reporting
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min: 1




1

,5) Companies report most changes in accounting principle currently.
Answer: FALSE
Diff: 1
LO: 1, Section 1
Bloom / IFRS: K
AACSB / IMA: None; Reporting
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min: 1

6) The loss on disposal of a significant component of a business is disclosed in the statement of
retained earnings.
Answer: FALSE
Diff: 1
LO: 1, Section 1
Bloom / IFRS: K
AACSB / IMA: None; Reporting
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min: 1

7) A change in accounting principle occurs when the principle used in the current year is
different from the one used by competitors in the current year.
Answer: FALSE
Diff: 1
LO: 1, Section 1
Bloom / IFRS: K
AACSB / IMA: None; Reporting
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min: 1

8) Comprehensive income includes all changes in stockholders' equity during a period except
those resulting from investments by stockholders and distributions to stockholders.
Answer: TRUE
Diff: 1
LO: 1, Section 1
Bloom / IFRS: K
AACSB / IMA: None; Reporting
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min: 1

9) Comprehensive income includes all revenues, expenses, gains, losses, and dividends.
Answer: FALSE
Diff: 1
LO: 1, Section 1
Bloom / IFRS: K
AACSB / IMA: None; Reporting
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min: 1

2

, 10) Alternative accounting methods affect the quality of earnings.
Answer: TRUE
Diff: 1
LO: 1, Section 1
Bloom / IFRS: K
AACSB / IMA: None; Performance Measurement
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min: 1

11) Improper recognition of income is not one of the factors affecting the quality of earnings.
Answer: FALSE
Diff: 1
LO: 1, Section 1
Bloom / IFRS: K
AACSB / IMA: None; Performance Measurement
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min: 1

12) Because pro forma earnings are based on specific rules, these amounts are highly reliable.
Answer: FALSE
Diff: 1
LO: 1, Section 1
Bloom / IFRS: K
AACSB / IMA: None; Performance Measurement
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min: 1

13) In horizontal analysis, the base year is the most current year being examined.
Answer: FALSE
Diff: 1
LO: 2, Section 2
Bloom / IFRS: K
AACSB / IMA: None; Performance Measurement
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min: 1

14) Horizontal analysis is a technique for evaluating a financial statement item in the current
year with other items in the current year.
Answer: FALSE
Diff: 1
LO: 2, Section 2
Bloom / IFRS: K
AACSB / IMA: None; Performance Measurement
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min: 1




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