In Regards to Extraordinary Items,which of the Following Statements Is

question 128

Multiple Choice

In regards to extraordinary items,which of the following statements is not correct?

• A)Losses due to lawsuits do not qualify as extraordinary.
• B)An extraordinary gain is reported the same as a loss - net of the income tax effect.
• C)Taking of a company assets by a foreign government are generally considered to be extraordinary items.
• D)Extraordinary items are reported separately from continuing operations because of their infrequent and unusual nature.

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Definitions:

Bargained-For-Exchange

A fundamental principle in contract law requiring that each party to a contract must exchange something of value for the agreement to be binding.

Legally Enforceable

Pertains to an agreement or contract that is recognized by law and can be upheld or imposed by a court.

Legal Detriment

In contract law, doing (or promising to do) something that one has a legal right not to do, giving up (or promising to give up) something that one has a legal right to keep, or refraining from doing (or promising not to do) something that one has a legal right to do.

Hamer v. Sidway

A landmark 1891 New York Court of Appeals case that established the principle of forbearance (refraining from an action) as valuable consideration in contract law.