The Following List Contains Several Items That Appear on an Income

question 191

Multiple Choice

The following list contains several items that appear on an income statement. $\begin{array} { l l l l } \hline \text { 1. } & \text { Other revenue and expenses } & 5 . & \text { Net income } \\\text { 2. } & \text { Income before taxes } & 6 . & \text { Operating revenues } \\\text { 3. } & \text { Income taxes } & 7 . & \text { Income from operations } \\\text { 4. } & \text { Operating expenses } & & \\\hline\end{array}$ Select the choice that lists the items in the order they would appear on a multiple-step income statement.

• A)6,1,7,4,2,3,5
• B)7,6,1,4,2,3,5
• C)6,4,7,1,2,3,5
• D)6,7,4,1,2,3,5

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Definitions:

Market System

An economic organization where choices relating to the investment in, production of, and distribution of goods and services are influenced by supply and demand dynamics, and where the prices are freely set in an open market pricing system.

Consumers Buy

Consumers buy refers to the action of individuals or households purchasing goods and services for personal use, driven by preferences, income, and prices.

Economic Profits

Profits calculated by subtracting both explicit and implicit costs from total revenues, which is a more comprehensive measure of true profitability.

Total Costs

The complete costs involved in the production of goods or services, including both fixed and variable costs.