Phoenix ACC 291 Week 5 Practice Questions Chapter 13 Answers (2017)

1. Sustainable income is equal to net income.

2. Which of the following is not an irregular item on the income statement?

3. Sudley Shoppe had severe damage done to its Christmas inventory due to an escaped circus elephant rampaging through the store. The inventory loss was $80,000 before applicable taxes of $20,000. How should Sudley Shoppe report the loss?

4. Which of the following is income that includes all changes in stockholders' equity during a period except those resulting from investments by stockholders and distributions to stockholders?

5. Assume the following cost of goods sold data for a company:

   2014	1,600,000
   2013	1,500,000
   2012	1,200,000

   
   If 2012 is the base year, what is the percentage increase in cost of goods sold from 2012 to 2014?

6. In vertical analysis, what is the base amount for depreciation expense?

7. Profitability ratios provide information about a firm’s success in generating income from operations.

8. The following information is available for Barkley Company:

   		2014		2013
   Accounts receivable		$ 360,000		$400,000
   Inventory		280,000		320,000
   Net credit sales		3,000,000		1,400,000
   Cost of goods sold		1,200,000		1,060,000
   Net income		300,000		170,000

   
   How much is the inventory turnover for 2014?

9. Which measure(s) is (are) an evaluation of a company’s ability to pay current liabilities?

10. Which of the following is true for reporting extraordinary items under IFRS?