A Company That Discontinues and Disposes of an Operation Component)

question 26

Multiple Choice

A company that discontinues and disposes of an operation component) should include the gain or loss on sale in the income statement as an)

• A) prior-period adjustment.
• B) a component of other comprehensive income.
• C) an amount that is reported after income from continuing operations but before net income.
• D) bulk sale of fixed assets included in income from continuing operations.

---

Definitions:

Price Setting

The process by which a company decides on the selling price of its products or services.

Identical Products

Goods that are exactly the same in every feature and aspect, making them perfect substitutes for one another.

Economic Profits

Total revenues minus total costs, where total costs include both explicit and implicit costs.

Competitive Market

A market structure characterized by a large number of buyers and sellers, free entry and exit, and products that are similar enough to be interchangeable.