A Loss Due to a Discontinued Operation Should Be Reported

question 153

Multiple Choice

A loss due to a discontinued operation should be reported on the income statement

• A) above income from continuing operations
• B) without related tax effect
• C) below income from continuing operations
• D) as an operating expense

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Definitions:

Trade-In Allowance

Trade-In Allowance is the credit a dealer offers to the consumer towards the purchase of a new item by trading in an older model or item.

Depreciation

A technique for distributing the expense of a physical asset throughout its lifespan.

Commercial Substance

A term used in accounting to indicate that a transaction significantly changes the economic position of the parties involved.

Real Estate Commissions

Fees paid to real estate agents for services related to the buying or selling of property, usually calculated as a percentage of the sale price.