Which of the Following Statements Regarding Nonrecurring and Other Special

question 94

Multiple Choice

Which of the following statements regarding nonrecurring and other special items is true?

• A) Some special items, such as changes in the value of certain balance sheet accounts, are excluded from the calculation of net income.
• B) Nonrecurring items such as discontinued operations are presented above the income tax expense line on the income statement.
• C) Discontinued Operations are reported net of tax as part of the income from continuing operations.
• D) Cumulative effect of change in accounting principles is reported on the income statement as part of income from continuing operations.

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Definitions:

Dividends

Payments made by a corporation to its shareholders from the earnings of the company, usually in the form of cash or stocks.

Shares

Holdings in a corporation or financial asset, these units confer rights to an equitable distribution of dividends from declared profits.

Quarterly Dividend

A dividend paid by a company to its shareholders every quarter, representing a portion of the company's earnings.

Capital Gains

The profit earned from the sale of an asset or investment which has increased in value over the holding period.