When a Company Discontinues and Disposes of a Component Segment

question 27

Multiple Choice

When a company discontinues and disposes of a component segment of its operations,the gain or loss from disposal should be reported as:

• A)an adjustment to retained earnings.
• B)a sale of fixed assets in "other" expense.
• C)an extraordinary item.
• D)an accounting change.
• E)a special item after continuing operations and before extraordinary items.

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Definitions:

Lesion

An injury or wound; a circumscribed area of pathologically altered tissue.

Pathologically Altered Tissue

Tissue that has undergone changes due to disease or disorders.

Intravenous Pyelogram (IVP)

The insertion of a radiopaque material into the vein for the purpose of X-raying the kidneys and ureters.

All-Liquid Diet

A diet consisting entirely of fluids or foods in liquid form, often recommended for medical reasons.