How Should the Gain or Loss That Is Considered Infrequent

question 67

Multiple Choice

How should the gain or loss that is considered infrequent but not unusual in nature be disclosed?

• A)separately in the income statement immediately after income from continuing operations
• B)on a net-of-tax basis in the income statement immediately after income from continuing operations
• C)as an extraordinary item
• D)separately in the income statement as a component of income from continuing operations

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Definitions:

Counterfactual Thinking

The human tendency to create possible alternatives to life events that have already occurred, something akin to imagining "what might have been."

Availability Heuristic

A cognitive bias wherein individuals judge the probability of events based on how easily examples come to mind.

Representativeness Heuristic

A cognitive shortcut that involves making judgments about the probability of an event under uncertainty, based on how much it resembles the typical case.

Theory of Mind

The ability to attribute mental states—beliefs, intents, desires, emotions, knowledge—to oneself and others, and to understand that others have beliefs, desires, and intentions that are different from one's own.