Extraordinary Items Occur When

question 34

Multiple Choice

Extraordinary items occur when

• A)a company sells an entire segment of the business.
• B)an event is unusual in nature but not infrequent in occurrence
• C)an event is infrequent in occurrence but not unusual in nature
• D)the event is unusual in nature and infrequent in occurrence.
• E)a company records an impairment loss on goodwill.

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Definitions:

Impairment Testing

The process of evaluating assets for indications of reduced recoverability, assessing whether their carrying value exceeds their recoverable amount.

Tangible Capital Assets

physical assets owned by a business that are used in its operations and have a useful life extending beyond a single accounting period.

Future Cash Flows

the projected cash receipts and payments a business expects to incur over a future period, crucial for financial modeling and valuation.

Fully Authorized

Pertains to a company having received all necessary approvals or sanctions to issue shares or undertake actions as per its governance framework or regulatory requirements.