Which of the Following Is a Required Disclosure in the Income

question 3

Multiple Choice

Which of the following is a required disclosure in the income statement when reporting the disposal of a component of the business?

• A)The gain or loss on disposal should be reported as an extraordinary item.
• B)Results of operations of a discontinued component should be disclosed immediately below extraordinary items.
• C)Earnings per share from both continuing operations and net income should be disclosed on the face of the income statement.
• D)The gain or loss on disposal should not be segregated, but should be reported together with the results of continuing operations.

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Definitions:

FOB (Free On Board)

A term used in shipping agreements to indicate that the seller is responsible for goods until they are loaded on a transport vessel, after which the buyer assumes responsibility.

Delivery Ex-Ship

Delivery Ex-Ship (DES) is a term used in international trade that indicates the seller is responsible for delivering the goods to a designated port and the buyer is responsible for unloading.

Risk Of Loss

A legal principle determining who bears the financial burden if goods are damaged, destroyed, or lost during a transaction.

Types Of Title

Distinct legal rights to own, use, and manage property, including full ownership and leasehold.