When transitory earnings are present, which of the following correctly depicts the order used on the income statement?Multiple Choice Income tax expense, income from continuing operations, unusual items, discontinued operations, net income. Income from continuing operations, unusual items, income tax expense, discontinued operations, net income. Income from continuing operations, discontinued operations, income tax expense, net income. Income tax expense, income from continuing operations, discontinued operations, net income.

Answered: transitory earnings are present, which…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 2MC: A prior period adjustment should be reflected, net of applicable income taxes, in the financial...

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When transitory earnings are present, which of the following correctly depicts the order used on the income statement?

Multiple Choice

Income tax expense, income from continuing operations, unusual items, discontinued operations, net income.
Income from continuing operations, unusual items, income tax expense, discontinued operations, net income.
Income from continuing operations, discontinued operations, income tax expense, net income.
Income tax expense, income from continuing operations, discontinued operations, net income.

Expert Solution

Step 1

Transitory earning are temporary earnings that are not earned in the regular course of business. They are not anticipated and recorded below the permanent income in the income statement

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