When a Company Discontinues an Operation and Disposes of the Discontinued

question 5

Multiple Choice

When a company discontinues an operation and disposes of the discontinued operation (component) , the transaction should be included in the income statement as a gain or loss on disposal reported as

• A) a prior period adjustment.
• B) an extraordinary item.
• C) an amount after continuing operations but before extraordinary items.
• D) a bulk sale of plant assets included in income from continuing operations.

---

Definitions:

Memorandum

A written message used in business and government, typically for internal communication, to convey information or decisions.

Formal

Pertaining to or following established, traditional rules or principles, especially in a social or cultural setting.

Decoder

A device or program that translates encoded data into its original format; in communication, someone who interprets the message.

Technologies

The use of scientific understanding to achieve practical goals, particularly within industrial sectors.