Which of the Following Is True Regarding Discontinued Operations

question 19

Multiple Choice

Which of the following is true regarding discontinued operations?

• A)If a loss is expected on disposal, the estimated loss is recognized in the financial statements as of the measurement date.
• B)If a loss is expected on disposal, the estimated loss is recognized in the financial statements as of the disposal date.
• C)If a loss is expected on disposal, recognition is deferred until realization.
• D)If a gain is expected on disposal, the estimated gain is recognized in the financial statements as of the measurement date.

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Definitions:

Daily Settlement

The process of reconciling buy and sell positions in futures and options markets at the end of each trading day based on the closing market prices.

Futures Positions

Futures positions are commitments to buy or sell a specified amount of a commodity, currency, or financial instrument at a specified price on a set future date.

Marking To Market

Marking to market is an accounting practice where assets and liabilities are adjusted to their current market values rather than their book values.

Margin Call

A demand by a broker that an investor deposit further cash or securities to cover possible losses.