Revenues from marketable securities and investments in securities, interest expense on borrowings, and gains and losses from peripheral activities appear as _____.The firm expects these sources of earnings to continue.
A)income from continuing operations
B)income, gains, and losses from discontinued operations
C)extraordinary gains and losses
D)retained earnings
E)paid-in-capital

Question

Quizplus · Accepted Answer

Revenues from marketable securities and investments in securities as well as interest expense on borrowings are part of income from continuing operations. Gains and losses from peripheral activities are also reported as part of income from continuing operations unless they are significant enough to be reported separately as extraordinary gains or losses. The fact that the firm expects these sources of earnings to continue further supports that they are part of income from continuing operations. Retained earnings and paid-in-capital represent different components of stockholders' equity and are not related to these sources of earnings.

Revenues from Marketable Securities and Investments in Securities, Interest Expense