Summary of Various Income Statement and Balance Sheet Items UPDATED ACTUAL QUESTIONS AND CORRECT ANSWERS

Summary of Various Income Statement and
Balance Sheet Items UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
Bad debts expense - Correct answers✔✔The amount of uncollectible accounts receivable
recognized as an expense on the income statement



Sales discounts taken - Correct answers✔✔The amount of discounts given to customers for early
payment, recognized as a reduction in sales revenue on the income statement



Depreciation expense on sales equipment - Correct answers✔✔The allocation of the cost of sales
equipment over its useful life, recognized as an expense on the income statement



Loss from operations of discontinued Division B - Correct answers✔✔The negative result of the
business activities of Division B that has been discontinued, recognized as a loss on the income
statement



Earnings per share - Correct answers✔✔The portion of a company's profit allocated to each
outstanding share of common stock, calculated and disclosed on the income statement



Gain on sale of land - Correct answers✔✔The profit realized from the sale of land, recognized as
a gain on the income statement



Administrative salaries - Correct answers✔✔The wages and benefits paid to administrative staff,
recognized as an expense on the income statement



Cash dividends declared and paid on common stock - Correct answers✔✔The cash distributions
to shareholders of common stock, disclosed in the statement of retained earnings