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1. What are the components of a multi-step income statement? What is included in

ID: 2481041 • Letter: 1

Question

1. What are the components of a multi-step income statement? What is included in each section and how is this information reported relative to tax effect? (Inlcuding EPS requirements)

2. Discuss the categories of a balance sheet and the type of information the presentation format can convey to users of the statement.

3. Discuss the different ways that temporary investments can be accounted for (both have the balance sheet valuation and reporting of income)

4. Name and discuss the objectives of accounting for property, plant, and equipment.

5. What are the three issues dealing with depreciation? Discuss the different depreciation methods.

Explanation / Answer

The multiple-step profit and loss statement segregates the operating revenues and operating expenses from the non-operating revenues, non-operating expenses, gains, and losses. The multiple-step income statement also shows the gross profit (net sales minus the cost of goods sold).

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