What Is the Correct Order to Present the Following Items

question 105

Multiple Choice

What is the correct order to present the following items on the income statement?

• A) Other revenues and expenses, income tax expense, discontinued operations, extraordinary items.
• B) Other revenues and expenses, income tax expense, extraordinary items, discontinued operations.
• C) Discontinued operations, extraordinary items, other revenues and expenses, income tax expense.
• D) Discontinued operations, extraordinary items, income tax expense, other revenues and expenses.

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Definitions:

Operating Cash Flow

The cash generated from the normal operating activities of a business within a specific time period.

Net Present Value

Net present value is the difference between the present value of cash inflows and the present value of cash outflows over a period of time, used in capital budgeting to assess the profitability of an investment.

Fixed Costs

Overheads that do not vary with production or sales volumes, encompassing rental fees, salary payments, and premiums for insurance.

Contribution Margin

The amount remaining from sales revenue after variable costs have been deducted, used to cover fixed costs and generate profit.