TBS

Question 1

Operations of a segment deemed “held for sale” go in:

Answer 1

Discontinued operations, because it has met all requirements for it to be classified as held for sale.

Question 2

A loss from a major strike by employees is:

Answer 2

Income from continuing operations, while it is infrequent it is not unusual for a company’s employees to go on strike.

Question 3

Gain on disposal of an operating segment is calculated by:

Answer 3

Sale Price - broker’s fee - book value of segment (which is what the company thinks they can get for the segment, the new basis)

Question 4

Tax expense/benefit is calculated on:

Answer 4

The net of Operating Gain/Loss and Gain/Loss on Disposal

Question 5

A change from tax basis to accrual basis is considered:

Answer 5

An Error Correction, because you go from non-GAAP to GAAP and it requires a restatement of prior period financials.

Question 6

A Change in Accounting Entity you:

Answer 6

Retrospectively restate prior period financials that are presented for comparative purposes.

Question 7

A change in accounting principle is not permitted if:

Answer 7

It is done so in order to increase earnings and stock price of the company.