Friday, October 10, 2014

Which of the following would be classified as an extraordinary item on the income statement?

Assuming there were no charges to retained earnings other than dividends of $20,000, the net income (loss) for 2010 was

1. $(20,000).

2. $(40,000).

3. $20,000.

4. $40,000.

5. $60,000.

Which of the following would be classified as an extraordinary item on the income statement?

1. Loss on disposal of a segment of business

2. Cumulative effect of a change in accounting principle

3. A sale of fixed assets

4. An error correction that relates to a prior year

5. A loss from a flood in a location that would not be expected to flood

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