Which is incorrect concerning the presentation of Income Statement? A. When items of income and expense are material, their nature and amount shall be disclosed separately. B. An entity shall present extraordinary items separately on the face of the income statement or in the notes to F/S. C. Natural presentation means that expenses are aggregated according to their nature like depreciation and employee benefits. D. Cost of sales method classifies expenses according to their function such as cost of sales, cost of distribution and cost of administrative activities. E. Both the natural presentation and functional presentation has their own merits for different types of entities, so the standard allows management to choose which they think is more relevant and reliable presentation.
Which is incorrect concerning the presentation of Income Statement? A. When items of income and expense are material, their nature and amount shall be disclosed separately. B. An entity shall present extraordinary items separately on the face of the income statement or in the notes to F/S. C. Natural presentation means that expenses are aggregated according to their nature like depreciation and employee benefits. D. Cost of sales method classifies expenses according to their function such as cost of sales, cost of distribution and cost of administrative activities. E. Both the natural presentation and functional presentation has their own merits for different types of entities, so the standard allows management to choose which they think is more relevant and reliable presentation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Which is incorrect concerning the presentation of Income Statement?
A. When items of income and expense are material, their nature and amount shall be disclosed separately.
B. An entity shall present extraordinary items separately on the face of the income statement or in the notes to F/S.
C. Natural presentation means that expenses are aggregated according to their nature like depreciation and employee benefits.
D. Cost of sales method classifies expenses according to their function such as cost of sales, cost of distribution and cost of administrative activities.
E. Both the natural presentation and functional presentation has their own merits for different types of entities, so the standard allows management to choose which they think is more relevant and reliable presentation.
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