In Reporting Extraordinary Transactions on a Statement of Cash Flows

question 115

Multiple Choice

In reporting extraordinary transactions on a statement of cash flows (indirect method) , the

• A) gross amount of an extraordinary gain should be deducted from net income.
• B) net of tax amount of an extraordinary gain should be added to net income.
• C) net of tax amount of an extraordinary gain should be deducted from net income.
• D) gross amount of an extraordinary gain should be added to net income.

Understand the flow of information among the key financial statements.

Recognize the implications of holding a controlling interest in another company and the requirement for consolidated financial statements.

Calculate and record unrealized gains and losses for investments classified as trading purposes.

Know the processes for recording the receipt and amortization of interest from bond investments.

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