Team Shirts Sold Its Surfboard Operations for $125,000 and Incurred

question 210

Multiple Choice

Team Shirts sold its surfboard operations for $125,000 and incurred a loss of $47,000 on the sale.This loss would be reported on the income statement as part of ________.

• A)discontinued operations
• B)extraordinary items
• C)other revenues and expenses
• D)income from continuing operations

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Definitions:

Stockholders' Equity

The residual interest in the assets of an entity that remains after deducting its liabilities, representing owners' claims against the company's assets.

Dividends Policy

A company's strategy or guidelines governing the amount and timing of dividend payments to its shareholders.

Stock Dividends

A form of dividend payment made by a corporation to its shareholders in the form of additional shares, rather than cash, based on the portion of shares already held.

Unlimited Liability

A legal structure in which business owners are personally responsible for all the debts of the business.