Indian Institute of Technology Madras
BS Degree Programme · Examination & Study Paper
Financial Forensics
Income statement & net income
Official Paper
Examination Instructions & Guidelines
- Solve on notebook/paper first before checking solutions.
- MCQ: Exactly 1 option is correct. Negative marking applies.
- Scientific calculator allowed for all calculations.
- Official answer key is sealed at the end of this sheet.
- Q1MCQ1 Mark·Choose one option
The Slugger and K Corporation produces custom-made dog toys. During the current fiscal year, Slugger and K had revenues of $460,000 and cost of goods sold of $310,000. The company pays 36 percent in taxes. What was Slugger and K’s net income in the current fiscal year?
- A$460,000
- B$150,000
- C$96,000
- D$354,000
- Q2MCQ1 Mark·Choose one option
When would a company report a net loss on the income statement?
- AWhen revenues are less than the sum of expenses plus dividends during an accounting period.
- BIf assets decreased during an accounting period.
- CIf liabilities increased during an accounting period.
- DWhen expenses exceeded revenues for an accounting period.
- Q3MCQ1 Mark·Choose one option
Which of the following statements regarding income is correct?
- ARevenues are reported on the income statement regardless of whether the customer has paid for the goods or services.
- BExpenses are reported on the income statement during the period they are paid for.
- CNet income includes a deduction for dividend payments made to stockholders.
- DNet income normally equals the net cash generated by operations.