Accounting Multiple Choice Question – 12 August 2024

For the two statements below:

1. A material profit or loss on the sale of part of the entity must appear in the income statement as an extraordinary item.
2. Dividends should be included in the income statement.

Decide whether they are true or false?

Select ONE answer:

1. Statement 1 – True, Statement 2 – True
2. Statement 1 – True, Statement 2 – False
3. Statement 1 – False, Statement 2 – True
4. Statement 1 – False, Statement 2 – False

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – Extraordinary items are prohibited. Dividends appear in the statement of retained earnings not the income statement

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