F distinguish between the operating and non-operating components of the income statement; Flashcards
Distinguish between the operating and non-operating components of the income statement
1
Q
Operating
A
financial firm: investing income, financing expenses
2
Q
Non-operating
A
Non-financial: Investing income, financing expenses
Investing income: Dividends and interest from investment in other firms.
Investment income and G,L from sale of securities = non-op for a non-financial firm.
Interest expense is based on the firms capital structure which is independent of the firms operations.
3
Q
Gen. op and non-op note:
A
They’re reported separately