[cpagal]

Question:

An extraordinary gain should be reported as a direct increase after which of the following?

A. Net Income

B. Comprehensive Income

C. Income from continuing operations, net of tax

D. Income from discontinued operations, net of tax

A is the correct answer, but why?

FAR - 08/30/15 - 90
AUD - 11/12/15 - 92
REG - 01/19/16 - 82
BEC - 02/29/16 - 83

Passed all on 1st attempt using GLEIM (full program) and NINJA (MCQ only)!!!

Louisiana Licensed CPA

[shanek327]

Extraordinary items are listed in a separate section on the income statement just like income from continuing operations and income from discontinued operations so it wouldn't affect those items.

Comprehensive income can be reported using the single-statement approach or the two-statement approach.

In either one, since the extraordinary items are listed before calculating net income, they do not directly increase comprehensive income. They do INDIRECTLY increase it though.

FAR - 75
AUD - 78
BEC - 82
REG - 77

2 Corinthians 5:21

Our value does not come from our skills and abilities, as good as they may be; it does not come from our GPA, our job, a promotion from that job to a better job, our success on the CPA exam, or anything of the like; but our value comes from the fact that we have a Creator who loves us, cares for us, and desires to help us navigate the rough waters of this life in a way that provides security, hope, and true, everlasting joy while we anticipate the life to come, with Him.

[Author]

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