When a Company Discontinues an Operation and Disposes of the Discontinued

question 43

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 other income and expense item.
• C)an amount after continuing operations and before net income.
• D)a bulk sale of plant assets included in income from continuing operations. S<\sup>56.Gains or losses on the disposal of investments should be shown in the income statement

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Definitions:

Demand Curve

A graphical representation showing the relationship between the quantity of a good that consumers are willing and able to purchase and its price.

Equation

A mathematical statement that asserts the equality of two expressions, typically involving variables and constants.

Total Revenue

The overall amount of money generated by a business from its sales activities before any costs or expenses are deducted.

Price

The financial outlay presumed, obligatory, or given in payment for an object.