Mod9D: Financial Statements

Question 0

Discontinued Operations are placed on the Income Statement or Retained Earnings as?

Answer 0

On IS as a separate category after income from continuing operations.

Question 1

Unusual or Infrequent Items are placed on the Income Statement or Retained Earnings as?

Answer 1

On Income Statement as income from continuing operations (after normal recurring revenues and expenses).

Question 2

Extraordinary Items are placed on the Income Statement or Retaining Earnings as?

Extraordinary are Unusual & Infrequent

Answer 2

On IS as a separate category after discontinued operations.

Question 3

Change in Accounting Principal are placed on the Income Statement or Retained Earnings as?

Answer 3

No longer on IS. Retrospective application. Report cumulative effect on A & L as of beginning of first period presented with offsetting adjustment to opening RE.

Question 4

Correction of Error is placed on Income Statement or Retained Earnings as?

Answer 4

Report as a prior period adjustment by re-stating FS. Offsetting adjustment to beginning RE.