010-111 · Question #258
Which would not be found on a quarterly profit and loss statement?
The correct answer is D. Fixed assets like land or a building. A profit and loss statement reports revenues and expenses over a period, while fixed assets like land or buildings appear only on the balance sheet.
Question
Which would not be found on a quarterly profit and loss statement?
Options
- ARevenue from membership dues.
- BExpenses due to payroll and benefits.
- CProportional fixed depreciation costs.
- DFixed assets like land or a building.
How the community answered
(30 responses)- A10% (3)
- B3% (1)
- C7% (2)
- D80% (24)
Why each option
A profit and loss statement reports revenues and expenses over a period, while fixed assets like land or buildings appear only on the balance sheet.
Membership dues represent earned revenue during the quarter and are properly recorded as income on the P&L statement.
Payroll and benefits are operating expenses incurred during the period and are correctly listed on the P&L statement.
Depreciation on fixed assets is allocated as a periodic expense on the P&L statement, representing the proportional cost of asset usage over time.
Fixed assets such as land and buildings are long-term resources owned by the organization and are reported on the balance sheet as assets, not on the income statement. The P&L statement records only income earned and expenses incurred during the reporting period, not the value of owned property.
Concept tested: P&L statement vs. balance sheet classification
Source: https://www.fasb.org/Page/ShowPdf?path=CON5.pdf
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