Test Bank Managerial Accounting Tools for Business Decision Making 10th Edition By Jerry Weygandt, Paul Kimmel, Jill Mitchell

Test Bank for Managerial Accounting
Tools for Business Decision Making
10th Edition By Jerry Weygandt, Paul
Kimmel, Jill Mitchell (All Chapters 1-
14, 100% Original Verified, A+
Grade)
All Chapters Arranged Reverse: 14-1
This is the Only Original and
Complete Test Bank for 10th Edition,
All Other Files in The Market are
Fake/Old/Wrong Edition.

,Managerial Accounting, 10e (Weygandt)
Chapter 14 Financial Analysis: The Big Picture

1) Analysts are interested in sustainable income, which is equal to the past year's net income.
Answer: FALSE
Diff: 1
LO: 1. Apply the concept of sustainable income and quality of earnings.
Bloom: K
AACSB / IMA: None / Performance Measurement
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min.: 1

2) One objective of the income statement is to separate the results of continuing operations from
those of discontinued operations.
Answer: TRUE
Diff: 1
LO: 1. Apply the concept of sustainable income and quality of earnings.
Bloom: K
AACSB / IMA: None / Reporting
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min.: 1

3) When the disposal of a significant segment occurs, the income statement should report both
income from continuing operations and income (loss) from discontinued operations.
Answer: TRUE
Diff: 1
LO: 1. Apply the concept of sustainable income and quality of earnings.
Bloom: K
AACSB / IMA: None / Reporting
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min.: 1

4) Other comprehensive income includes all changes in stockholders' equity during a period
including those changes resulting from investments by stockholders.
Answer: FALSE
Diff: 1
LO: 1. Apply the concept of sustainable income and quality of earnings.
Bloom: K
AACSB / IMA: None / Reporting
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min.: 1




1

,5) Companies report most changes in accounting principle currently.
Answer: FALSE
Diff: 1
LO: 1. Apply the concept of sustainable income and quality of earnings.
Bloom: K
AACSB / IMA: None / Reporting
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min.: 1

6) The loss on disposal of a significant component of a business is disclosed in the statement of
retained earnings.
Answer: FALSE
Diff: 1
LO: 1. Apply the concept of sustainable income and quality of earnings.
Bloom: K
AACSB / IMA: None / Reporting
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min.: 1

7) A change in accounting principle occurs when the principle used by a company in the current
year is different from the one used by its competitors in the current year.
Answer: FALSE
Diff: 1
LO: 1. Apply the concept of sustainable income and quality of earnings.
Bloom: K
AACSB / IMA: None / Reporting
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min.: 1

8) Comprehensive income includes all changes in stockholders' equity during a period except
those resulting from investments by stockholders and distributions to stockholders.
Answer: TRUE
Diff: 1
LO: 1. Apply the concept of sustainable income and quality of earnings.
Bloom: K
AACSB / IMA: None / Reporting
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min.: 1

9) Comprehensive income includes all revenues, expenses, gains, losses, and dividends.
Answer: FALSE
Diff: 1
LO: 1. Apply the concept of sustainable income and quality of earnings.
Bloom: K
AACSB / IMA: None / Reporting
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min.: 1

2

, 10) Alternative accounting methods affect the quality of earnings.
Answer: TRUE
Diff: 1
LO: 1. Apply the concept of sustainable income and quality of earnings.
Bloom: K
AACSB / IMA: None / Performance Measurement
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min.: 1

11) Improper recognition of income is not one of the factors affecting the quality of earnings.
Answer: FALSE
Diff: 1
LO: 1. Apply the concept of sustainable income and quality of earnings.
Bloom: K
AACSB / IMA: None / Performance Measurement
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min.: 1

12) Because pro forma earnings are based on specific rules, these amounts are highly reliable.
Answer: FALSE
Diff: 1
LO: 1. Apply the concept of sustainable income and quality of earnings.
Bloom: K
AACSB / IMA: None / Performance Measurement
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min.: 1

13) In horizontal analysis, the base year is the most current year being examined.
Answer: FALSE
Diff: 1
LO: 2. Apply horizontal analysis and vertical analysis.
Bloom: K
AACSB / IMA: None / Performance Measurement
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min.: 1

14) Horizontal analysis is a technique for evaluating a financial statement item in the current
year with other items in the current year.
Answer: FALSE
Diff: 1
LO: 2. Apply horizontal analysis and vertical analysis.
Bloom: K
AACSB / IMA: None / Performance Measurement
AICPA: BB: Legal/Regulatory Perspective; FC: Reporting; PC: None
Min.: 1

15) Another name for horizontal analysis is trend analysis.
Answer: TRUE
3