An earthquake destroyed the home office building of a company located in an inland city. This should be reported as a(n)
a. extraordinary loss.
b. prior period adjustment.
c. loss from continuing operations.
d. loss from discontinued operations.
A
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The credit to the merchandise inventory account when making adjustments at the end of the accounting period will be the same amount as was debited at the end of the previous accounting period
a. True b. False Indicate whether the statement is true or false
Income before taxes for financial reporting usually differs from taxable income reported to tax authorities. Which of the following is/are not true?
a. Some of the differences may arise because of permanent differences (items that affect income for financial reporting but never affect taxable income, or vice versa). b. Some of the differences may arise because of temporary differences (items that affect income for financial reporting in a different period than for tax reporting). c. The difference between income tax expense and income tax payable represents the tax effects of permanent differences: either the firm will receive future benefits (deferred tax assets) or it must pay future taxes (deferred tax liabilities). d. U.S. GAAP and IFRS require firms to measure income tax expense based on income for financial reporting (excluding permanent differences) and the income tax authorities impose taxes on taxable income. e. all of the above
If you bought a security at $10 a share and its price then rose to $30, you might wish to protect your profit by placing a stop-loss order at, say, $28 a share
Indicate whether the statement is true or false
When a cash and investment pool of a certain city was established, the debt service fund transferred investments to the pool having a cost of $3,000,000 but a current fair market value of $3,100,000. To record this transfer, a single journal entry was made by the debt service fund that included which of the following?
A. A debit to Equity in Pooled Cash and Investments in the amount of $3,000,000. B. A debit to Investments in the amount of $3,000,000. C. A credit to Investments in the amount of $3,100,000. D. A credit to Revenues-Change in Fair Value of Investments in the amount of $100,000.