11) Hurricane Octavio caused $14,500 worth of damage to a warehouse in Idaho owned by Team Shirts. This loss would be reported on the income statement as part of ________.
A) discontinued operations
B) extraordinary items
C) depreciation expense
D) income from continuing operations
12) Team Shirts sold its surfboard operations for $125,000 and incurred a loss of $47,000 on the sale. This loss would be reported on the income statement as part of ________.
A) discontinued operations
B) extraordinary items
C) other revenues and expenses
D) income from continuing operations
13) On June 1, Team Shirts sold its surfboard operations and incurred a loss on the sale. This year's operating income or loss from surfboard operations before June 1 would be reported on the income statement as part of ________.
A) discontinued operations
B) extraordinary items
C) other revenues and expenses
D) income from continuing operations
14) Team Shirts sold its surfboard operations for $125,000 and made a profit of $12,000 on the sale. This gain would be reported on the income statement as part of ________.
A) discontinued operations
B) extraordinary items
C) other revenues and expenses
D) continuing operations
15) Lee's Lions had to shut down its store in Houston. There was no buyer, so Lee's Lions sold the store equipment and closed out the business at a loss. This loss would be reported on the income statement as part of ________.
A) continuing operations
B) discontinued operations
C) extraordinary items
D) other revenues and expenses
16) Lee's Lions had to shut down its store in Houston on July 31. This year's operating income or loss from the store before July 31 would be reported on the income statement as part of ________.
A) discontinued operations
B) extraordinary items
C) other revenues and expenses
D) income from continuing operations
17) A tornado in New York City caused $48,000 worth of damage to Out of Africa's store and merchandise. The insurance company paid the business $50,000. The $2,000 gain would be reported on the income statement as part of ________.
A) discontinued operations
B) extraordinary items
C) other revenues and expenses
D) continuing operations
18) Generally accepted accounting principles require that discontinued operations be reported as ________.
A) part of regular operations
B) a before-tax line item separate from continuing operations
C) an after-tax line item separate from continuing operations
D) an extraordinary item
19) Which of the following items affects retained earnings but does not affect net income?
A) extraordinary items
B) declaring dividends
C) issuing stock
D) discontinued operations
20) Which of the following items affects total shareholders' equity without being reported on the income statement?
A) purchase of treasury stock
B) extraordinary items
C) discontinued operations
D) repayment of long-term debt