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:

Managerial Activities

Tasks and responsibilities undertaken by managers, such as planning, leading, organizing, and controlling to achieve organizational goals.

Mintzberg

A reference to Henry Mintzberg, a renowned academic and author known for his work on business and management practices, especially in the context of organizational structures and strategy.

Managerial Role

The specific duties and responsibilities assigned to managers, including planning, organizing, leading, and controlling an organization's resources.

Entrepreneur

A person who organizes, manages, and assumes the risks of a business or enterprise, often seen as an innovator or source of new ideas.