A Company Incurs a Loss Due to Restructuring

question 42

Multiple Choice

A company incurs a loss due to restructuring. This is the first time the company has experienced a restructuring. The loss from this event would be shown as:

• A)a normal business occurrence requiring an adjustment to the beginning balance in Retained Earnings.
• B)an extraordinary item.
• C)a prior- period adjustment.
• D)other gains and losses.

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Definitions:

Useful Life

The estimated period over which an asset is expected to be usable for its intended purpose, affecting its depreciation.

Machine

Equipment or apparatus designed to perform a specific task in the manufacturing process.

Present Value

The immediate worth of anticipated money or streams of cash flows, computed with an agreed-upon rate of return.

Cash Inflows

Money received by a business from its operational, financing, and investing activities.