Chapter 4 Multiple choice questions

A multiple-step income statement and a single-step income statement would report the same subtotal for which of the following amounts?

Income before taxes. In a single-step income statement, companies usually report income tax expense in a separate line in the income statement. The subtotal of all other expenses and losses are subtracted from the subtotal of all revenues and gains to calculate a subtotal equal to income before taxes.

Which of the following captions would more likely be found in a multiple-step income statement?

Operating income Operating income is an important subtotal in a multiple-step income statement.

An item typically included in the income from continuing operations section of the income statement is:

Restructuring costs Restructuring costs are reported as a component of continuing operations. Discontinued operations are reported separately, net of tax, after continuing operations. Prior period adjustment to beginning retained earnings.