Which of the Following Items Should Be Classified as an Extraordinary

question 133

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) gain 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

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Definitions:

Cash

Money in the form of coins or banknotes, especially that held to conduct transactions or as part of a business's liquid assets.

Prepaid Insurance

An asset account that represents payments made in advance for insurance coverage, which is expensed over the period the insurance policy is in effect.

Trial Balance

A bookkeeping worksheet wherein the balances of all ledgers are compiled into debit and credit account columns to check for the arithmetic accuracy of the accounts.

Debit Column

In bookkeeping, the column in an account where debits are recorded, typically on the left-hand side.