Nonoperating Items on a Multiple-Step Income Statement Do NOT Include

question 51

Multiple Choice

Nonoperating items on a multiple-step income statement do NOT include ________.

• A)interest income
• B)interest expense
• C)gain from disposal of a fixed asset
• D)administrative expenses

---

Definitions:

Capitalized Lease

A lease agreement accounted for as an asset and liability on the balance sheet, indicating ownership-like characteristics.

Lessee

The party in a lease agreement who obtains the right to use an asset in exchange for periodic lease payments.

Residual Value Guarantees

Promises made by lessees to lessors that the asset being leased will have a certain value at the end of the lease term.

Lessors

Parties that lease or rent out assets to lessees in exchange for periodic payments.