While calculating operating profit which will be added to net profit a. Profit on Sale of Asset b. Increase in General Reserves c. Interest received d. Refund of Tax
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- Which of the following is a measurement of earnings that represents the profit before interest, taxes, depreciation and amortization are subtracted? A. net income B. retained earnings C. EBITDA D. EPSIf a company capitalizes costs that should be expensed, how is its income statement for the current period impacted? A. Assets understated B. Net Income understated C. Expenses understated D. Revenues understatedWorking Capital. Identify the working capital accounts related to, (d) income tax expense. For each account, indicate whether an increase in the working capital asset or liability would be an addition or subtraction when reconciling from net income to cash flows from operations.
- If an asset increases in value, the increase is noted as________. Select one: a. an increase in net profit in the statement of comprehensive income b. an increase in retained earnings in statement of financial position c. an increase in “other profit” in statement of comprehensive income d. an increase in revaluation surplus in the statement of financial position and other comprehensive income in the statement of comprehensive incomeWhich of the following is used when computing for the accounting rate of return (ARR)? a. Income before depreciation but after taxes. b. Income after depreciation and taxes. c. Income before depreciation and taxes d. Income after depreciation but before taxes.How to determine the percentage by which operating income can increase if the entire R&D expenditure if recorded as an intangible asset instead of being charged to expense.
- The financial capital concept requires that net assets shall be measured at current cost adjusted for changes in purchasing power historical cost adjusted for changes in purchasing power historical cost current costUnder this concept a profit is earned only if the financial (or money) amount of the net assets at the end of the period exceeds the financial (or money) amount of net assets at the beginning of the period, after excluding any distributions to, and contributions from, owners during the period. Performance capital maintenance Financial capital maintenance Capital position maintenance Physical capital maintenanceThe numerator of the return on total assets is a. net income b. net income plus tax expense c. net income plus interest expense d. net income minus preferred dividends
- Working Capital. Identify the working capital accounts related to (a) revenues recognized and deferred, wages, For each account, indicate whether an increase in the working capital asset or liability would be an addition or subtraction when reconciling from net income to cash flows from operations.Which should be subtracted from the net income when using the indirectmethod? A. Loss on sale of investmentB. Amortization of patentC. Increase in accounts receivableD. Increase in accounts payableThe net assets approach of computing for the net income requires this item to be added to the ending capital. a. Beginning capital b. Additional investments c. Withdrawals d. Increase in Liabilities
