ACCT 3120 Chapter 3

How much income or loss in a given time revenue-expense over period of time (usually a year, but every quarter for corporations).

Can be short, but will ALWAYS include Gross Profit.

Revenue - Expenses = Net Income, doesn't show Gross Profit

For a revenue, gain, expense, or loss to be OTHER, it must be ___ and/or ___.

A single step income statement is short and has very few categories.

• True

• False

Answer explanation

Multiple-step income statements differ from single-step income statements in that they categorize gross profit and SSIS does not.

Which of the following are listed after income tax on the income statement and therefore must be calculated "net of tax"?

• Other Revenues & Gains

• Other Expenses & Losses

• Other Comprehensive Income

• Discontinued Operations

• Dividends

Which of the following would be considered other revenues or gains?

• Dividend Revenue

• Gain on Sale of Equipment

• Interest Revenue

• Gain from Insurance Claim

• Interest on Bonds & Notes

Which of the following would be considered other expenses or losses?

• Dividend Expense

• Loss on extinguishment of debt obligations

• Restructuring Charges

• Loss on flood

• Interest on Bonds & Notes

If it is discovered that depreciation expense has been miscalculated for the current and previous years, it will be resolved for all years on the income statement.

• True

• False

Answer explanation

When depreciation expense is miscalculated, we resolve ONLY the current year on the income statement. Previous years will be resolved on the statement of retained earnings.

Dividend revenue is recorded as other revenues & gains on the income statement.

• True

• False