When a Company Discontinues and Disposes of a Component Segment

question 27

Multiple Choice

When a company discontinues and disposes of a component segment of its operations,the gain or loss from disposal should be reported as:

• A)an adjustment to retained earnings.
• B)a sale of fixed assets in "other" expense.
• C)an extraordinary item.
• D)an accounting change.
• E)a special item after continuing operations and before extraordinary items.

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Definitions:

FTC Act

The Federal Trade Commission Act, a statute that established the Federal Trade Commission (FTC) and empowers it to regulate unfair or deceptive commercial practices.

Telemarketing Sales Rule

A federal regulation that sets standards for businesses using telemarketing strategies to ensure consumer protection.

Prize Promotion

A marketing strategy that offers awards or gifts to participants, often used to stimulate interest in a product or service.

Solicitation

The act of asking for or trying to obtain something from someone, often used in legal context to refer to the act of seeking to procure a person to commit a crime.