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

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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.

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3
Q

Gen. op and non-op note:

A

They’re reported separately

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