1.) Which of the following is included in the income from continuing operations section of the income statement?

a) All are included in the continuing operations section

b) $15,000 Loss of equipment in fire

c) $50,000 Loss on disposal of Component A

d) $100,000 Income from operations of discontinued component A

1.5) Which of the following should be recognized immediatley in the current accounting period as an expense in the income statement?

a. Allocation of prepaid costs

b. Amortization of intangible assets

c. Management salaries

d. Depreciation of fixed assets

1.6) Which of the following events would be classified as an operating activity in a statement of cash flows prepared using the indirect method?

a. issuing notes payable

b. sale of a long-term investment

c. Amortization expense

d. payment of cash dividends

1.11) In 2019, Olsen Company materially overstated last year's net income. How should they fix this error in year 2020?

a. Do not correct the error

b. Record an expense in the current year to reduce income

c. Adjust beginning retained earnings

d. Record a reduction in the current year revenue to decrease net income