QUESTION 1 An example of \"dirty surplus\" (associated with gains and losses rep

Question

QUESTION 1

An example of "dirty surplus" (associated with gains and losses reported directly to equity) is the use of:

Extraordinary items

401K plans

Available-for-sale marketable securities

Other post-employment benefits

1 points   

QUESTION 2

According to SFAC No. 6, gains are

Potential red flags

Non recognized in SFAC No. 6

Increases in equity from peripheral transactions

Always non-recurring items

1 points   

QUESTION 3

Revenue should be recognized only when:

Contract is signed

Cash is received

Realized or realizable and earned

Sale is made

1 points   

QUESTION 4

Which of the following is a non-recurring item?

Cost of goods sold

Gains or losses on foreign currency translation

Extraordinary item

Revenue when recognized aggressively

1 points   

QUESTION 5

To arrive at comprehensive income, start with net income and add or subtract:

Extraordinary items

Discontinued operations

Gains & losses from certain marketable securities & foreign currency translation

Treasury stock purchases

1 points   

QUESTION 6

Du Pont had cash flow from operations of $5,070, cash flows from investments of $(1,244), cash flows from financing of $(3,537), and net income of $2,314. Du Pont s free cash flow is:

$1,533

$289

$3,826

$2,756

1 points   

QUESTION 7

Global Crossing sold fiber optics capacity using long-term contracts & booked revenues in the current period. This is an example of:

Aggressive revenue recognition

A product cost

Conservative revenue recognition

A non-recurring item

1 points   

QUESTION 8

Which of the following is an other comprehensive income item found in the statement of stockholders equity?

Earnings before income & taxes (EBIT)

Extraordinary items

Contingencies

Unrealized marketable securities gains & losses

1 points   

QUESTION 9

Marriott had the following earnings numbers for 2002 ($ millions): net income = 236 (also income from continuing operations), provision for income tax = 134, interest expense = 109, depreciation & amortization = 222. Marriott s EBIT for 2001 was:

$345 million

$479 million

$701 million

$236 million

1 points   

QUESTION 10

Hilton has the following cash flow & earnings numbers for 2002 ($ millions): cash flows from operations = 585, cash flows for investing = (154), cash flows from financing = (443), net income = 166. Hilton had free cash flows of:

$(12 million)

$431 million

$739 million

$419 million

Extraordinary items

401K plans

Available-for-sale marketable securities

Other post-employment benefits

Explanation / Answer

1.Answer C

Unrealized losses and gains on available for sale marketable securities is an example of Dirty Surplus

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