Income Statement

Question 1

Under GAAP, a gain that is unsual and infrequent should be reported as

Answer 1

Income from continuing operations

Question 2

Gown Inc sold a warehouse and used the proceeds to acquire a new warehouse. The excess of the proceeds over the carrying amount of the warehouse sold

Answer 2

When a fixed asset is sold, gain or loss is recognized as part of income from continuing operations. The amount of the gain or loss is equal to the difference between the proceeds from the sale and the carrying amount of the fixed asset sold

Question 3

Gain from the sale of a discontinued

Answer 3

Gain from the sale of a discontinued segment is recorded net of tax on the balance sheet

Question 4

Is a separate disclosure required for events that occur frequently?

Answer 4

No. A separate disclosure is only required for unusual events.

Question 5

Accounting Equation

Answer 5

Assets= Liabilities+ Equity