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Cleveland State University | Name: | Jadira Yacila | Course: | ACT 451: Auditing | Term: | Spring 2012 | Assignment: | Code 3 | Date: | 4/4/2012 |

1. Access the glossary (Master Glossary) to answer the following. a. What is the definition of “ordinary income” (loss)
(740-270-20) Ordinary income (or loss) refers to income (or loss) from continuing operations before income taxes (or benefits) excluding significant unusual or infrequently occurring items. Extraordinary items, discontinued operations, and cumulative effects of changes in accounting principles are also excluded from this term. The term is not used in the income tax context of ordinary income versus capital gain. The meaning of unusual or infrequently occurring items is consistent with their use in the definition of the term extraordinary item.
Ordinary income is income (or loss) exclusively from operations. Taxes expenses are not deducted. It does not include capital gains, or any other gain that could be infrequent or unusual. b. What is an error in previously issued financial statements?
(250-10-20) An error in recognition, measurement, presentation, or disclosure in financial statements resulting from mathematical mistakes, mistakes in the application of generally accepted accounting principles (GAAP), or oversight or misuse of facts that existed at the time the financial statements were prepared. A change from an accounting principle that is not generally accepted to one that is generally accepted is a correction of an error.
Errors found in financial statements that were already prepared. These errors could be recognition, measurement, presentation or disclosure errors due to mathematical mistakes, improper application of GAAP or oversight/misuse of facts. c. What is the definition of “earnings per share”?
(260-10-20) The amount of earnings attributable to

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