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:

Top Management

The highest level of managers in an organization, responsible for controlling and directing the overall operations.

Control Of Operations

The oversight and management of core business activities to ensure efficiency, effectiveness, and alignment with organizational objectives.

Flexible Budget Report

A budget that adjusts or flexes with changes in volume or activity, providing a more useful comparison of actual to budgeted performance.

Production

The process of creating goods or services using labor, technology, materials, and other inputs.