continuity of income.

principal activities of the reporting entity.

consistency of income stream.

reliability of measurements.

Instructor Explanation: See Chapter 4.

Points Received: 4 of 4

Comments:

Question 2. Question :

(TCO 5) Major Co. reported a 2011 income of $300,000 from continuing operations before income taxes and a before-tax extraordinary loss of $80,000. All income is subject to a 30% tax rate. In the 2011 income statement, Major Co. would show the following line-item amounts for income tax expense and net income.

$66,000 and $210,000

$90,000 and $154,000

$90,000 and $276,000

$66,000 and $220,000

Instructor Explanation:

Points Received: 4 of 4

Comments:

Question 3. Question :

(TCO 5) The financial statement presentation of a change in depreciation method is most similar to that of reporting

changes in accounting estimates.

prior period adjustments.

ion of errors.

extraordinary items.

Instructor Explanation: See Chapter 4.

Points Received: 4 of 4

Comments:

Question 4. Question :

(TCO 5) Cash flows from investing activities do not include

proceeds from issuing bonds.

payment for the purchase of equipment.

proceeds from the sale of marketable securities.

cash outflows from acquiring land.

Instructor Explanation: See Chapter 4.

Points Received: 4 of 4

Comments:

Question 5. Question :

(TCO 5) Review Rowdy’s Restaurants cash flow (in millions):

Rowdy’s would report net cash inflows (outflows) from financing activities in the amount of

$1,100.

$(1,100).

$820.

$900.

Instructor Explanation:

Points Received: 4 of 4

Comments: