Execucomp Corporation's Financial Statements in the Current Year Show a Loss

question 64

Multiple Choice

Execucomp Corporation's financial statements in the current year show a loss from discontinued operations,a prior period adjustment,and an extraordinary gain.If Execucomp's income statement is prepared according to generally accepted accounting principles (as illustrated in your text) ,which of the following four items would appear second in sequence in the income statement?

• A)Prior period adjustment.
• B)Income from continuing operations.
• C)Loss from discontinued operations.
• D)Extraordinary gain.

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Definitions:

Stockholders

Individuals or entities that own shares in a corporation, thus holding partial ownership of the company.

Current Assets

Refers to assets that a company expects to convert into cash within one year or one business cycle, whichever is longer.

Net Fixed Assets

The value of a company’s fixed assets minus any accumulated depreciation, representing the actual value of the company's fixed assets.

Owners' Equity

This is the residual interest in the assets of the entity after deducting liabilities, essentially representing the ownership interest of shareholders in a company.