A discontinued operation must be? A discontinued operation must be?a) Any sold division b) A majorline of business orseparategeographicalunprofitablesubsidiaryareac)Anysegmentd)Any

Explanation of Discontinued Operation: A discontinued operation represents a major component of a…

Answered: A discontinued operation must be? a)…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 1DQ

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The identifiable assets acquired and liabilities assumed in a business combination are generally measured at: a. Acquisition-date fair values b. Previous carrying amounts c. Fair value less cost to sell d. Cost
(TCO B) How are accounting for direct costs, indirect costs, and issuance costs reflected under the acquisition method of accounting for a business combination?
Which of the following statements regarding a business segment is false? Multiple Choice A business segment's income for the period prior to the disposal and the gain or loss resulting from disposing of the segment's assets are reported separately. A business segment has assets, liabilities, and financial results of operations that can be separated from those of other parts of the company. A business segment is a part of a company that is separated by its products/services or by geographic location.
Assume an income statement with the following classifications: RevenuesCost of goods soldDistribution expensesGeneral & administrative expensesOther revenues and expensesIncome tax on income from continuing operationsGain from disposal of discontinued operationsIncome tax on gain from discontinued operationsNone of the above Indicate by letter how each of the following should be classified: Advertising expenseAmortization of a patent held as an investmentCash dividend received on short-term investmentDepreciation on plant that manufactures good for sale (prior to sale of the goods)Freight on salesIncome tax effect of loss on sale of plantIncome tax on gain on sale of short-term investment in securitiesInterest expenseInterest revenueLoss on sale of patentDividend revenue from investmentSalary of company presidentSalesSales returnsServices sold
Also known as the historical cost principle, ________ states that everything the company owns or controls (assets) must be recorded at their value at the date of acquisition. A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principle
Which of the following is not a reason for the physical inventory count to differ from what is recognized on the companys books? A. mismanagement B. shrinkage C. damage D. sale of services to customers
SLO-4.3. Internal control does not consist of policies and procedures that OProtect assets from misuse OAid management in directing operations toward achieving business goals OGuarantee the company will not be bankrupt OEnsure that business information is accurate
A4
Consolidation financial statements are prepared when a parent-subsidiary relationship exists in recognition of the accounting principle concept of: a. Reliability b. Entity c. Materiality d. Going Concern
A gain or loss on sales downstream from parent to subsidiary is initially included in parent income and must be 100% eliminated Select one: True False
1. Lower of cost or market is used to value inventories. Choices: a. Full disclosure principle b. Time period assumption c. Materiality constraint d. Cost Principle e. Revenue recognition principle f. Conservatism Constraint g. Matching principle h. Economic entity assumption i. Monetary unit j. Going concern k. Some other answers 2. Hard rock cafe is a wholly-owned subsidiary of Jollibee Foods corporation and hard rock cafe operating result and financial condition are included in the consolidated financial statements of pepsiCo. (Do not use full disclosure) Choices: a. Full disclosure principle b. Time period assumption c. Materiality constraint d. Cost Principle e. Revenue recognition principle f. Conservatism Constraint g. Matching principle h. Economic entity assumption i. Monetary unit j. Going concern k. Some other answers
Classifications Where would each of the following items most likely be reported in a companys financial statements? Assume the monetary amount of each item is material. 1. Bad debts expense 2. Sales discounts taken 3. Depreciation expense on sales equipment 4. Loss from operations of discontinued Division 5. Earnings per share 6. Gain on sale of land 7. Administrative salaries 8. Cash dividends declared and paid on common stock 9. Gain from sale of discontinued Division 10. Loss on sale of equipment 11. Advertising expense 12. Merchandise inventory (ending) 13. Loss from write-off of obsolete inventory 14. Cash paid to acquire equipment 15. Unrealized increase in fair value of available-for-sale securities

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A discontinued operation must be? a) Any sold division b) A major line of business or separate geographical unprofitable subsidiary area c) Any segment d) Any