Question 1: True or False (Give explanations - 20 points) 1. Discontinued operations and gains and losses are both reported net of tax in the income statement. 2. The accrual basis recognizes revenue when earned and expenses in the period when cash is paid. 3. Income before income taxes is computed by deducting interest expense from income from operations. 4. An asset which is expected to be converted into cash, sold, or consumed within one year of the statement date is always reported as a current asset 5. Trade receivables include notes receivable and advances to officers and employees Question 2 Inventory Method ( 25 points)