Over the Top,Inc

question 61

Multiple Choice

Over the Top,Inc.sells one of its four swing sets.The company regularly sells seasonal outdoor furniture.How shall the gain on the sale be classified on the income statement?

• A)Extraordinary item
• B)Ordinary income
• C)Accounting Change
• D)Discontinued Operation
• E)Recapture

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Definitions:

Revenue Account

An account that records the income earned by a company from its business activities.

Debit

A bookkeeping record that raises the value of an asset or expense, or reduces the value of a liability or equity.

Expense Account

An account used to record expenditures incurred by a company, relating to its operational activities.

Supplies

Items used in the day-to-day operations of a business, typically consumable in nature, such as office supplies, cleaning materials, and manufacturing components.