Regarding Discontinued Operations,which of the Following Statements Is Incorrect

question 113

Multiple Choice

Regarding discontinued operations,which of the following statements is incorrect?

• A) Gains and losses on the sale of plant assets and equipment are reported as Other Income and (Expenses).
• B) A loss on discontinued operations is reported with an addition for the applicable income tax.
• C) The sale of an identifiable division of the business is reported on the income statement under the category Discontinued Operations.
• D) The Discontinued Operations category of the income statement includes information about segments of the business that have been sold.

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Definitions:

Derivative Instrument

A derivative instrument is a financial contract whose value is dependent on the performance of underlying assets, indexes, or rates.

Hedged Item

An asset, liability, firm commitment, or highly probable forecast transaction identified by an entity to manage risks through a hedging relationship.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Hedge Accounting

An accounting method that recognizes the offsetting position of a hedge in the financial statements to reduce the volatility of earnings.