When an Entity Reports on a Sale of a Component

question 112

Multiple Choice

When an entity reports on a sale of a component of the business

• A) any income or loss from operations of the component should be reported in the income from continuing operations section, but any gain or loss on the sale of the component should be presented below the income from continuing operations section.
• B) current operating income or loss of the component and any gain or loss on sale of the component should be presented in a separate section of the income statement.
• C) any gain or loss on the sale should always be presented as a component of other comprehensive income.
• D) all information related to the sold component should be reported solely in the footnotes accompanying the financial statements.

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Definitions:

Measurement Tool

Instruments or methodologies used to assess, evaluate, or quantify various metrics or performance indicators.

Performance Management

A continuous process where managers and employees work together to plan, monitor, and review an employee's work objectives and overall contribution to the organization.

Developmental Purpose

Refers to the aim to aid in the growth or progress of individuals, organizations, or societies through education, training, or specific initiatives.

Performance Management

The process by which an organization involves its employees in improving effectiveness toward achieving company goals, including setting expectations, monitoring progress, and evaluating outcomes.