1st Edition

ISBN: 9780132162302

Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

Publisher: PEARSON

Concept explainers

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Textbook Question

Chapter 5, Problem 5.3MC

Beach and Poole, CPA is reviewing income statement presentation with some interns that are working with the firm during the summer break. The interns were asked to list three things that were true about the multiple-step income statement. Choose the item below that is a true statement.

a. The multiple-step income statement lists gains and losses as part of income from normal operations
b. The multiple-step income statement snows income or loss from operations after the gross margin and operating expenses lines but before other revenues and gains.
c. Freight out is classified as part of the inventory cost and moved to cost of goods sold when the item is purchased by a third party.
d. Gain/loss on the sale of equipment held tor disposal from discontinued operations is included in the continuing operations section of the income statement.

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Chapter 5, Problem 5.2MC

Chapter 5, Problem 5.4MC

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Chapter 5 Solutions

Intermediate Accounting

Ch. 5 - What are the three limitations of the income...Ch. 5 - In what way is the income statement useful for...Ch. 5 - Prob. 5.3Q Ch. 5 - Prob. 5.4Q Ch. 5 - What management behavior does the term earnings...Ch. 5 - What is the difference between permanent and...Ch. 5 - Prob. 5.7Q Ch. 5 - Prob. 5.8Q Ch. 5 - Prob. 5.9Q Ch. 5 - Prob. 5.10Q

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Solution Summary: The author explains that the correct option is the multi-step income statement, which distinguishes the operating revenues and expenses from the non-operating revenues, expenses, gains, and losses.

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