Under USGAAP, a Discontinued Operation Is a Component of an Entity

question 134

True/False

Under U.S.GAAP, a discontinued operation is a component of an entity, comprising operations and cash flows that clearly differ from the rest of the entity, both operationally and for financial reporting. Segments, divisions, subsidiaries, and groups of assets can qualify as a component of an entity.

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Definitions:

Fiscal Year

A 12-month period used for accounting purposes and preparing financial statements, which may not align with the calendar year.

Supplies Expense

Costs associated with consumable items or supplies used in the day-to-day operations of a business.

Adjusting Entry

An adjusting entry is a journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate years.

Physical Count

A method used in inventory management to ensure the actual number of items in stock matches the recorded numbers by counting them manually.