When transitory earnings are present, which of the following correctly depicts the order used on the income statement?Multiple Choice Income tax expense, income from continuing operations, unusual items, discontinued operations, net income. Income from continuing operations, unusual items, income tax expense, discontinued operations, net income. Income from continuing operations, discontinued operations, income tax expense, net income. Income tax expense, income from continuing operations, discontinued operations, net income.

Answered: transitory earnings are present, which…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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When transitory earnings are present, which of the following correctly depicts the order used on the income statement?

Multiple Choice

Income tax expense, income from continuing operations, unusual items, discontinued operations, net income.
Income from continuing operations, unusual items, income tax expense, discontinued operations, net income.
Income from continuing operations, discontinued operations, income tax expense, net income.
Income tax expense, income from continuing operations, discontinued operations, net income.

Expert Solution

Step 1

Transitory earning are temporary earnings that are not earned in the regular course of business. They are not anticipated and recorded below the permanent income in the income statement

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