Which of the Following Items Is Reported in Neither the Income

question 23

Multiple Choice

Which of the following items is reported in neither the income statement nor the statement of cash flows?

• A) Sale of marketable securities at a loss.
• B) Sale of marketable securities at a gain.
• C) Adjustment of available-for-sale marketable securities owned to current market value at balance sheet date.
• D) Investment of excess cash in marketable securities.

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Definitions:

Expense Recognition Principle

An accounting principle that states expenses should be recognized and recorded when they are incurred, regardless of the timing of cash payments.

Financial Statements

Papers that give a summary of a corporation's financial status, featuring the balance sheet, income statement, and statement of cash flows.

Fiscal Year

A 12-month period used for accounting purposes that may not coincide with the calendar year.

Lifetime Operations

The entire period during which an entity or project is expected to operate or function, from inception to completion or cessation.