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Match Each Item to Financial Statement Reporting Section That Will

Question 86

Matching

Match each item to financial statement reporting section that will be reported on a company’s financial statements,You may use each choice more than once or not at all.

Premises:

Responses:

A loss incurred by Maranda Corporation due to a strike by employees of the company

Income from continuing operations section of the income statement

A large loss of inventory incurred by a meat-packing factory due to a government FDA inspection which found dangerously high levels of bacteria; no previous situations in the company’s history

Discontinued operations section of the income statement

Manufacturing circuits were determined obsolete and had to be written down to a nominal scrap value due to an improved manufacturing process

Cumulative effect of a change in accounting principle section of the income statement

A loss due to a decline in market value on an available-for-sale investment

A separate comprehensive income item

Increase in value of goodwill

Not reported on the income statement or comprehensive income statement

Financial impacts of the adoption of a new FASB standard on goodwill.

The financial effects of outsourcing the company’s industrial product division

Premises:

A loss incurred by Maranda Corporation due to a strike by employees of the company

A large loss of inventory incurred by a meat-packing factory due to a government FDA inspection which found dangerously high levels of bacteria; no previous situations in the company’s history

Manufacturing circuits were determined obsolete and had to be written down to a nominal scrap value due to an improved manufacturing process

A loss due to a decline in market value on an available-for-sale investment

Increase in value of goodwill

Financial impacts of the adoption of a new FASB standard on goodwill.

The financial effects of outsourcing the company’s industrial product division

Responses:

Income from continuing operations section of the income statement

Discontinued operations section of the income statement

Cumulative effect of a change in accounting principle section of the income statement

A separate comprehensive income item

Not reported on the income statement or comprehensive income statement

Correct Answer:

Premises:

Responses:

A loss incurred by Maranda Corporation due to a strike by employees of the company

A large loss of inventory incurred by a meat-packing factory due to a government FDA inspection which found dangerously high levels of bacteria; no previous situations in the company’s history

Manufacturing circuits were determined obsolete and had to be written down to a nominal scrap value due to an improved manufacturing process

A loss due to a decline in market value on an available-for-sale investment

Increase in value of goodwill

Financial impacts of the adoption of a new FASB standard on goodwill.

The financial effects of outsourcing the company’s industrial product division