Which of the Following Items Should Be Classified as an Extraordinary

question 149

Multiple Choice

Which of the following items should be classified as an extraordinary item on a corporate income statement?

• A) gain on the retirement of a bond payable
• B) loss from land condemned for public use
• C) loss due to an discontinued operation
• D) selling treasury stock for more than the company paid for it

---

Definitions:

Direct Materials

The raw materials directly used in the manufacturing of a product, easily traceable to the finished good.

Product

An item or service created through a process and offered in the market to satisfy consumer needs or wants.

Advertising Expense

Costs incurred in promoting products or services, classified under operating expenses in the income statement.

Period Cost

Expenses that are not directly tied to the production of goods or services, such as sales, administrative, and other operating expenses.