The Gain Resulting from a Company Selling Off a Component

question 59

Multiple Choice

The gain resulting from a company selling off a component of its business is reported on the company's income statement as:

• A)an extraordinary item
• B)discontinued operations
• C)a prior period adjustment
• D)a cumulative accounting adjustment

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Definitions:

Farm Subsidy

A governmental financial aid paid to farmers and agribusinesses to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities.

Agricultural Surpluses

The production of agricultural goods that exceeds the immediate needs of the population, leading to stockpiling or exports.

Suburbanization

The process whereby populations move from urban areas to suburbs, leading to the growth of residential areas on the outskirts of cities.

Middle-Class Americans

A socioeconomic group consisting of people who fall between the working class and the upper class within the American society, often characterized by moderate levels of income and education.