Question

1. Which of the following is not considered an unusual or infrequently occurring item on an income statement?

Multiple Choice

• Operating income or loss from discontinued operations.

• Foreign currency transaction gains and losses.

• Corporate restructuring charges.

• Gains and losses from sales of investments.

2. Donna is reviewing the income statement of Brier Company. She notices that Brier’s income statement includes an item labeled “income attributable to noncontrolling interests.” Donna should assume that Brier Company:

Multiple Choice

• is not partially owned by another company.

• sold a subsidiary during the current fiscal period.

• owns a controlling interest in another company that is less than 100%.

• owns 100% of the outstanding shares of another company.

Answer 1

1.

Correct Answer is D Gains and losses from sales of investments.

Gains and losses from sales of investments is a usual or frequent occuring item on income statement

-Foreign currency transaction gains and losses is reported under Other Comprehensive Income

-Operating income or loss from discontinued operations is an unusual or infrequently occurring item on an income statement

-Corporate restructuring charges.is an unusual or infrequently occurring item on an income statement

Thus, Gains and losses from sales of investments is not considered an unusual or infrequently occurring item on an income statement

2.

Correct Answer is C owns a controlling interest in another company that is less than 100%.

Income attributable to noncontrolling interests is part of Non Controlling Interest. This is shown in Consolidated Financial Statement of holding company when the holding  company holds majority shares (grater than 50% but less than 100%) in another company. When holding company owns 100% share then another company is wholly owned subsidiary of holding company and there is no Non Cotrolling Intetest.

Thus, Donna should assume that Brier Company owns a controlling interest in another company that is less than 100%