Answered: Statement 1: In the statement of…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4MC: Which of the following statements about capitalizing costs is correct? A. Capitalizing costs refers...

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Which statement is incorrect?

a. Under the transactions approach, net income is computed as the excess of income over expenses

b. Under the capital maintenance approach, net income is computed as the excess of ending capital over beginning capital, excluding the effect of investments and withdrawals by owners.

c. Unusual and infrequent items of expenses should be presented in in the income statement as a component of income from continuing operation.

d. The single statement of comprehensive income shows a detailed presentation of all income and expenses, regardless of whether these income and expenses are recognized or not in the profit or loss.

e. None of the above

Statement 1: In the statement of changes in equity, the effect of the correction of a prior period error is presented separately for each component of equity.

Statement 2: Preference share dividend appear under the retained earnings section of the statement of changes in equity.

a. True, True

b. False, False

c. True, False

d. False True

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