A nonoperating item on a multiple-step income statement that reflects financial decisions is ________.
A) gain from sale of inventory
B) interest expense
C) income tax expense
D) operating profit

Question

Quizplus · Accepted Answer

Interest expense is a nonoperating item that reflects financial decisions as it is related to the company's financing activities rather than its core operations. Gain from sale of inventory and operating profit are both operating items that are directly related to the company's core operations. Income tax expense, although a nonoperating item, does not necessarily reflect financial decisions as it is influenced by both operating and financial activities.

A Nonoperating Item on a Multiple-Step Income Statement That Reflects