Unusual Gains and Losses Are Items on the Income Statement

question 123

Multiple Choice

Unusual gains and losses are items on the income statement that

• A) are typical of everyday activities but do not occur frequently.
• B) are not typical of everyday activities or do not occur frequently.
• C) include write down of inventories and write off of bad debts.
• D) are not usually disclosed separately.

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Definitions:

Revenue Recognition

The accounting principle that revenue should be recognized in the accounting period in which it is earned and realizable, regardless of when cash is received.

Business Transactions

Economic events or conditions that affect the financial position of a company, which are recorded as entries in accounting records.

Time Period

A specific duration during which financial transactions are recorded and reported in financial statements.

Quality

The degree to which a product or service meets the requirements and expectations of customers.