Betsy Kirkland, Inc

question 27

Multiple Choice

Betsy Kirkland, Inc. incurred a flood loss during the first quarter of 2011 that is deemed both unusual and infrequent. The loss is considered immaterial to the twelve-month period, but is material in amount relative to the first quarter. The proper accounting treatment in the first quarter interim statement is to:

• A) Ignore the loss.
• B) Record the loss in the first quarter as an extraordinary loss, net of income taxes.
• C) Record one-fourth of the loss in the first quarter as an extraordinary loss, net of income taxes.
• D) Ignore the loss in the first quarter, and record it in the annual statement only.
• E) Record the loss in the first quarter, but not as an extraordinary loss, and disclose the loss in a separate note or in the income statement as a separate line item.

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Definitions:

Intersex Condition

A broad term used to describe a variety of conditions where a person is born with reproductive or sexual anatomy that doesn't fit typical definitions of male or female.

Inherited Condition

A health condition or disease that is passed from parents to offspring through genes, also known as a genetic condition.

Sex Chromosomes

Chromosomes that determine the biological sex of an individual, with the most common configurations being XX for females and XY for males.

Intersex Condition

A condition present at birth where an individual has reproductive or sexual anatomy that doesn’t fit the typical definitions of female or male.