Which of the Following Is a Required Disclosure in the Income

question 131

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 continuing operations, discontinued 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:

Fiduciary Duty

A legal obligation of one party to act solely in the best interest of another party, such as a trustee for a beneficiary.

Partnership's Profits

Partnership's profits refer to the share of income generated by a business partnership that is distributed among its partners according to the terms of their agreement.

Personal Income Tax

A tax levied on the income of individuals, which varies according to the income level and financial situation of the taxpayer.

Withdrawing

The act of removing or pulling back from a commitment, activity, bank account, or legal proceeding.