Which of the Following Would Be Classified as an Extraordinary

question 2

Multiple Choice

Which of the following would be classified as an extraordinary item on the income statement?

• A)Loss on disposal of a segment of business
• B)Cumulative effect of a change in accounting principle
• C)A sale of land
• D)An error correction that relates to a prior year
• E)A loss from a flood in a location that would not be expected to flood

---

Definitions:

Command Economies

Economic systems where government decisions rather than market mechanisms primarily dictate production, allocation, and prices of goods and services.

Laissez-Faire Economy

A market system in which private-party transactions are conducted without the interference of government actions like regulations, privileges, tariffs, and subsidies.

Marginal Tax Rate

The tax rate paid on the next dollar earned.

Average Tax Rate

Total amount of tax paid divided by total income.