Chapter 4

Question 1

Statement of operations or statement of earnings is used to summarize the profit-generating that occurred during a particular reporting period

Answer 1

Income Statement

Question 2

Traditional net income plus other non-owner changes in equity

Answer 2

Comprehensive Income

Question 3

Certain gains and losses that are excluded from the calculation of net income, but included in the calculation of comprehensive income

Answer 3

Other Comprehensive Income/Losses (OCI)

Question 4

Change statement summarizing the transactions that caused cash to change during the period

Answer 4

Statement of Cash Flows

Question 5

Revenues, expenses (including income tax), gain, and losses, excluding those related to discontinued operations and extraordinary items

Answer 5

Income from continuing operations

Question 6

Provision for income taxes; reported as a separate expense in corporate income statements

Answer 6

Income Tax Expense

Question 7

Comprises revenues, expenses, gains, and losses as measured according to the regulations of the appropriate taxing authority

Answer 7

Taxable Income

Question 8

Includes revenues and expenses directly related to the principal revenue-generating activities of the company

Answer 8

Operating Income

Question 9

Includes gains and losses and revenues and expenses related to peripheral or incidental activities of the company

Answer 9

Nonoperating Income

Question 10

Income statement format that groups all revenues and gains together and all expenses and all losses together

Answer 10

Single-step

Question 11

Income statement format that includes all number of intermediate subtotals before arriving income from continuing operations

Answer 11

Multi-step

Question 12

Refers to the ability of reported earnings (income) to predict a company’s future earnings

Answer 12

Earnings Quality

Question 13

Costs to restore land or other property to its original condition after extraction of the natural respurce ends

Answer 13

Restoration Costs

Question 14

Associates (allocates) income tax expense (or income tax gross profit net sales benefit if there is a loss) with each major component of income that causes it

Answer 14

Intraperiod Tax Allocation

Question 15

The discontinuance of a component of an entity whose operations and cash flows can be clearly distinguished from the rest of the entity

Answer 15

Discontinued Operations

Question 16

Material events and transactions that are both unusual in nature and infrequent in occurrence

Answer 16

Extraordinary Items

Question 17

Addition to or reduction in the beginning retained earnings balance in a statement of shareholders’ equity due to a correction of an error

Answer 17

Prior Period Adjustment

Question 18

The amount of income earned by a company expressed on a per share basis

Answer 18

Earnings Per Share (EPS)

Question 19

Incorporates the dilutive effect of all potential common shares

Answer 19

Diluted EPS

Question 20

Amount of other comprehensive income accumulated over the current and prior periods

Answer 20

Accumulated Other Comprehensive Income

Question 21

Inflows and outflows of cash related to transactions entering the determination of net income

Answer 21

Operating Activities

Question 22

Involve the acquisition and sale of long-term assets used in the business and non-operating investing activities

Answer 22

Investing Activities

Question 23

Cash inflows and outflows from transactions with creditors and owners

Answer 23

Financing Activities