QUESTIONS 45 THROUGH 68 RELATE TO FINANCIAL STATEMENT ANALYSIS

54. Assume U.S. GAAP (generally accepted accounting principles) applies unless

otherwise noted.

For the most recent year a manufacturing company reports the following items on

their income statement:

Interest expense $62,500

Loss on disposal of fixed assets $50,000

Realized gain on sale of available-for-sale securities $17,750

Which of the items is classified as an operating item in the company’s income

statement?

A. Interest expense.

B. Loss on disposal of fixed assets.

C. Realized gain on sale of available-for-sale securities.