How Should the Gain or Loss That Is Considered Infrequent

question 6

Multiple Choice

How should the gain or loss that is considered infrequent be disclosed?

• A) separately in the income statement immediately after income from continuing operations
• B) on a net-of-tax basis in the income statement immediately after income from continuing operations
• C) as an contingency item in the footnotes
• D) separately in the income statement as a component of income from continuing operations

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Definitions:

Monetary Compensation

Payment given to someone in exchange for their services or to compensate for loss or injury, typically in the form of money.

Receivables Turnover

A financial ratio that measures how effectively a company collects its accounts receivable, calculated by dividing total sales by average accounts receivable.

Inventory Turnover

A measure of how frequently a company sells and replaces its stock of goods during a period, offering insight into sales efficiency and inventory management.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated as current assets divided by current liabilities.