Which of the Following Statements Is INCORRECT

question 42

Multiple Choice

Which of the following statements is INCORRECT?

• A)The balance sheet caption "Discontinued Operations" includes both operating income or loss of the segment during the divestiture period and gains or losses on the transaction at the point of sale of the segment.
• B)Income from discontinued operations is a component of net income.
• C)All gains and losses from discontinued operations are shown "net of tax."
• D)Financial analysts typically do not include discontinued operations in predictions of future corporate income because the discontinued segments will not continue to generate income for the business.

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Definitions:

Credibility

The quality of being trusted and believed in, often based on a reputation for honesty and reliability.

Indexed

A term referring to the adjustment of income, benefits, or prices in accordance with changes in a price index, typically to preserve purchasing power.

Inflation

A sustained increase in the general price level of goods and services in an economy over a period of time, leading to a decrease in the purchasing power of money.

Fed Tightened

Refers to the Federal Reserve's actions to reduce the money supply and raise interest rates to control inflation.