1
Williams Accounting Final IWU Questions
with Answers (100% Correct Answers)
Which of the following manufacturing cost elements occurs in a process cost
system?
Direct materials.
Direct labor.
Manufacturing overhead.
All of these. Answer: All of these.
Which of the following income statement figures would probably be the best
indicator of a company's future performance?
Total revenues
Gross profit
Income from operations
Net income Answer: Income from operations
When preparing an income statement, which of the following is the proper
order for income statement components?
Other comprehensive income items Net income, Comprehensive income
Net income, Comprehensive income, Other comprehensive income items
Net income, Other comprehensive income items, Comprehensive income
,2
Comprehensive income, Other comprehensive income items, Net income
Answer: Net income, Other comprehensive income items, Comprehensive
income
Which of the following statements regarding changes in accounting principles
is not true?
Most changes in accounting principles are retroactively reported. Most changes
in accounting principles are only reported in current periods when the principle
change takes place.
Consistency is one of the biggest concerns when a change in accounting
principle is undertaken.
Changes in accounting principles are allowed when new principles are
preferable to old ones. Answer: Most changes in accounting principles are only
reported in current periods when the principle change takes place.
When a change in depreciation method occurs
the cumulative effect of the change should be reflected on the income statement
as of the beginning of the next year.
prior years' financial statements should be changed to reflect the newly adopted
method.
the cumulative effect of the change in accounting principle should be classified
as an discontinued operations on the income statement. the change should be
reported in current and future years. Answer: the change should be reported in
current and future years.
Which of the following items appears on the income statement before income
before income taxes?
,3
Other revenues and gains.
Comprehensive income.
Discontinued operations.
Other comprehensive income. Answer: other revenues and gains
Which of the following would not be considered an example of a discontinued
operation?
Disposal of a significant component of a business
Shifting production processes within an operation
Elimination of an entire activity
Elimination of a major class of customers Answer: Shifting production
processes within an operation
Kingbird, Inc. disposes of an unprofitable segment of its business. The
operation of the segment suffered a $223000 loss in the year of disposal. The
loss on disposal of the segment was $123000. If the tax rate is 32%, and income
before income taxes was $1623000,
the losses from discontinued operations are reported net of income taxes at
$346000.
net income is $1277000.
the income from continuing operations is $1103640.
, 4
the income tax expense on the income before discontinued operations is
$456720. Answer: the income from continuing operations is $1103640.
Comprehensive income would not include
unrealized gains on available-for-sale securities.
dividends declared.
discontinued operations.
other expenses and losses. Answer: dividends declared
Which one of the following is not a tool in financial statement analysis?
Horizontal analysis
Circular analysis
Ratio analysis
Vertical analysis Answer: Circular Analysis
Horizontal analysis is also known as
linear analysis.
vertical analysis.
common size analysis.
trend analysis. Answer: trend analysis
Comparative balance sheets
Williams Accounting Final IWU Questions
with Answers (100% Correct Answers)
Which of the following manufacturing cost elements occurs in a process cost
system?
Direct materials.
Direct labor.
Manufacturing overhead.
All of these. Answer: All of these.
Which of the following income statement figures would probably be the best
indicator of a company's future performance?
Total revenues
Gross profit
Income from operations
Net income Answer: Income from operations
When preparing an income statement, which of the following is the proper
order for income statement components?
Other comprehensive income items Net income, Comprehensive income
Net income, Comprehensive income, Other comprehensive income items
Net income, Other comprehensive income items, Comprehensive income
,2
Comprehensive income, Other comprehensive income items, Net income
Answer: Net income, Other comprehensive income items, Comprehensive
income
Which of the following statements regarding changes in accounting principles
is not true?
Most changes in accounting principles are retroactively reported. Most changes
in accounting principles are only reported in current periods when the principle
change takes place.
Consistency is one of the biggest concerns when a change in accounting
principle is undertaken.
Changes in accounting principles are allowed when new principles are
preferable to old ones. Answer: Most changes in accounting principles are only
reported in current periods when the principle change takes place.
When a change in depreciation method occurs
the cumulative effect of the change should be reflected on the income statement
as of the beginning of the next year.
prior years' financial statements should be changed to reflect the newly adopted
method.
the cumulative effect of the change in accounting principle should be classified
as an discontinued operations on the income statement. the change should be
reported in current and future years. Answer: the change should be reported in
current and future years.
Which of the following items appears on the income statement before income
before income taxes?
,3
Other revenues and gains.
Comprehensive income.
Discontinued operations.
Other comprehensive income. Answer: other revenues and gains
Which of the following would not be considered an example of a discontinued
operation?
Disposal of a significant component of a business
Shifting production processes within an operation
Elimination of an entire activity
Elimination of a major class of customers Answer: Shifting production
processes within an operation
Kingbird, Inc. disposes of an unprofitable segment of its business. The
operation of the segment suffered a $223000 loss in the year of disposal. The
loss on disposal of the segment was $123000. If the tax rate is 32%, and income
before income taxes was $1623000,
the losses from discontinued operations are reported net of income taxes at
$346000.
net income is $1277000.
the income from continuing operations is $1103640.
, 4
the income tax expense on the income before discontinued operations is
$456720. Answer: the income from continuing operations is $1103640.
Comprehensive income would not include
unrealized gains on available-for-sale securities.
dividends declared.
discontinued operations.
other expenses and losses. Answer: dividends declared
Which one of the following is not a tool in financial statement analysis?
Horizontal analysis
Circular analysis
Ratio analysis
Vertical analysis Answer: Circular Analysis
Horizontal analysis is also known as
linear analysis.
vertical analysis.
common size analysis.
trend analysis. Answer: trend analysis
Comparative balance sheets
