A Loss Due to Discontinued Operations Should Be Reported on the Income

question 107

Multiple Choice

A loss due to discontinued operations should be reported on the income statement

• A) before extraordinary items.
• B) before income taxes expense.
• C) after net income.
• D) after extraordinary items.

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Definitions:

Profit Center

A business segment whose manager has control over cost and revenue but has no control over investments in operating assets.

Revenue

The complete sum of revenue a business earns from sales of goods or provision of services within a designated timeframe.

Controlling Costs

The process of monitoring, managing, and regulating expenses to operate within the budget and maximize profitability.

Residual Income

The income that remains after deducting all required costs of capital and operating expenses, indicating the net income generated beyond the minimum rate of return.