Discontinued Operations and Extraordinary Items Are Two Components of the Income

question 18

True/False

Discontinued operations and extraordinary items are two components of the income statement that are reported after income from operations or are reported separately because of their unique nature.

Recognize concepts of loss aversion, mental accounting, and risk aversion in decision making.

Distinguish between true and false assumptions regarding economic decisions and principles.

Understand the concept of opportunity cost in economic decision making.

Comprehend the difference between rational and irrational decision making.

---

Definitions:

Operations to Net Income

An analysis or measure that illustrates how operating activities contribute to a company's net income.

Intracompany Comparisons

Intracompany comparisons involve analyzing the financial performance and operational efficiencies within different segments or departments of the same company.

Intercompany Comparisons

The evaluation and analysis of financial statements and performance between different departments or subsidiaries within the same company.

Consistency

An accounting principle that requires companies to apply the same accounting methods and procedures from period to period.