Revenue Recognition Principle

Questions:
QUESTION 1 (14 MARKS)
Accounting terminology
Listed below are technical accounting terms introduced in this chapter:
Cash Dividend Comprehensive Income Extraordinary Item P/E Ratio Unusual or Infrequent Item
Stock Dividend Additional Paid-In Capital Treasury Stock Discontinued Operations Consistency Rule
Prior Period Adjustment Stock Split Basic Earnings Per Share Income from Continuing
Operations
Revenue Recognition Principle
Each of the following statements may (or may not) describe one of these technical terms. In the space provided beside each statement, indicate the accounting term
described, or answer “None” if the statement does not correctly describe any of the terms.
1.1. A financial statement showing the revenue, expenses, and net earnings of a corporation during the current accounting period = ____________________________
1.2. A distribution of cash to stockholders = __________________________
1.3. A distribution to stockholders of additional shares of stock, accompanied by a proportionate reduction in the par value per share = ____________________
1.4. The market price of a share of preferred stock, divided by the net income of the corporation = _______________________
1.5. A correction in the amount of net income reported in an earlier accounting period = ______________
1.6. An event that is material in dollar amount, unusual in nature, and not expected to recur in the foreseeable future = _______________________
1.7. A subtotal sometimes included in an income statement to assist investors in forecasting the income of future accounting periods =___________________

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