Which of the Following Is an Argument Supporting the "Current

question 24

Multiple Choice

Which of the following is an argument supporting the "current operating" income recognition school of thought?

• A)Most financial statement users look only to bottom-line net income to assess current performance and to make predictions regarding subsequent years' performance.
• B)Under this approach, management makes the decision on whether or not an item is extraordinary and therefore excluded from the income statement.
• C)The summation of all income displayed on the income statement for a period of years should reflect the reporting entity's net income for that period.
• D)Proper classification within the income statement allows both normal recurring items and unusual, infrequently occurring items to be displayed separately within the same statement.

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Definitions:

Parking Lot Cleaning

The service of removing trash, debris, and sometimes snow from outdoor parking areas to maintain cleanliness and safety.

Gas & Electric Company

A utility company providing natural gas and electricity services to residential, commercial, and industrial customers.

Accounting Equation

Formula that represents the relationship between the assets, liabilities, and owner's equity of a company: Assets = Liabilities + Owner’s Equity.

Identification Codes

Unique sequences of numbers or letters used to identify specific items, individuals, transactions, or documents.