Which of the following is true?
A)Income from operations would increase other income.
B)Income before income taxes would be shown as a component of operating income on the income statement.
C)Gains and losses on the sales of investments are included in nonoperating income (loss).
D)Income tax expense is shown as part of operating expenses.

Question

Quizplus · Accepted Answer

Gains and losses on the sales of investments are not directly related to the company's core business operations, hence are included in nonoperating income (loss). Income from operations is calculated as revenue minus operating expenses, thus it does not include other income. Income before income taxes is calculated as income from operations plus other income, and is not a component of operating income. Income tax expense is not a part of operating expenses, but is shown as a separate line item on the income statement.

Which of the Following Is True