Evaluating Whether the Disposal of a Component of an Entity

question 83

Multiple Choice

Evaluating whether the disposal of a component of an entity constitutes a discontinued operation begins with ________.

• A)remeasuring the value of net assets held for disposal
• B)identifying the cash flows that can be clearly distinguished operationally
• C)segregating its operating revenues and expenses from those of continuing operations
• D)assessing whether a strategic shift has occurred

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Definitions:

Mark-Up Percentage

The percentage added to the cost price of goods to cover overhead and profit, determining the selling price.

Material Charge

A fee or cost applied for the materials used in the manufacturing or production of goods.

Material Cost

The cost of raw materials and components used to create a product.

Price Skimming

A pricing strategy where a company charges the highest initial price that customers will pay and then lowers it over time.