Multiple Choice: Income Statement Amounts Select the correct answer for each of the following:

1. Under generally accepted accounting principles, revenue normally includes:

a. Cash and receivables generated from the sale of goods and services.

b. The amount of cash generated from the sale of long- term assets.

c. Increases in the value of long-term assets and decreases in the value of long-term liabilities.

d. Increases in the value of inventory produced during the period.
A gain is recorded when:

a. Inventory held for resale is sold at more than its carrying amount.

b. Inventory held for resale is sold for less than its carrying amount.

c. Land is sold for more than its carrying amount.

d. Land is sold for less than its carrying amount.
Cost of goods sold normally includes:

a. The cost of raw materials included in products sold.

b. The cost of labor used to produce goods currently held in inventory.

c. The cost of production equipment purchased during the period.

d. All of the above.
Other expenses reported in the income statement should include:

a. The cost of materials used in the production process.

b. Interest expense on bank loans.

c. The purchase price of land acquired during the period to be used as a future building site.

d. The cost of labor used in the production process.