Which of the Following Statements Regarding Income from Continuing Operations

question 246

Multiple Choice

Which of the following statements regarding income from continuing operations is incorrect?

• A) Income from continuing operations represents the part of the business that should continue from period to period.
• B) Income from continuing operations helps investors make predictions about future earnings.
• C) Income tax expense is subtracted to arrive at income from continuing operations.
• D) A gain on sale of equipment is outside the business's core business and is not part of other income.

Grasp the concept of bounded rationality and its implications for decision-making.

Acknowledge the impact of psychological biases on decision-making processes.

Recognize the value of creativity and flexible thinking in decision-making.

Understand the concept of programmed and nonprogrammed decisions and their application in organizational contexts.

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Definitions:

Inventory Turnover

A financial metric indicating how many times a company has sold and replaced its inventory over a specific period.

Quick Ratio

Current assets less inventories divided by current liabilities. A financial ratio that measures a firm’s liquidity, the ability to pay its bills in the short run, without depending on converting inventory into cash. Also called the Acid Test.

Current Ratio

The Current Ratio is a financial metric used to evaluate a company's ability to pay its short-term liabilities with its short-term assets, indicating liquidity.

Prepaid Items

Expenses paid in advance for goods or services to be received in the future.