1. Which of the following is an advantage of the multiple-step income statement over the le-step income statement? Multi-step income statement. ay reports gross profit for the year. does not classify operating expenses. c. is simpler to prepare. d. does not report income from operations. 2. How should hitherto extraordinary items (now deleted) be reported in the income ement with effect from January 2016? a. Reported under discontinued operations Reported under other expenses and losses or other revenues and gains. c. Reported under operating expenses. d. Not reported at all. 3. If common stock was issued to acquire $40,000 Equipment, how would the transaction appear on the statement of cash flows? a. It would depend on whether you are using the direct or the indirect method. b. It would be a positive $40,000 in the financing section and a negative $40,000 in the investing section. in the investing section. noncash investing and financing activities. c. It would be a negative $40,000 in the financing section and a positive $40,000 d. It would not appear on the statement of cash flows but rather on a schedule of 4. An income statement is used for analyzing which of the following? Liquidity b.) Profitability Solvency c. d. Leverage 5. Which of the following items will not appear in the retained earnings statement