When a Business Segment Is Discontinued During the Year,the Gain

question 40

Multiple Choice

When a business segment is discontinued during the year,the gain or loss on disposal

• A) is reported as an extraordinary item.
• B) should include only the loss or income from operating the discontinued segment for the current period.
• C) excludes only the gain or loss on disposal of the segment.
• D) should be shown net of applicable income taxes.

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Definitions:

Average Total Cost Curve

A graphical representation of the total cost (fixed plus variable) per unit of output produced, plotted against different levels of output.

Short-Run

A period in which at least one factor of production is fixed, and firms can only partially adjust their output levels.

Long-Run Minimum Cost

The lowest cost at which a firm can produce any given level of output in the long run, when all inputs can be varied.

Average Total Cost Curve

A graph that shows the cost per unit of output at different levels of production, illustrating how average total cost changes with changes in output.