When a Component of a Business Has Been Discontinued During

question 26

Multiple Choice

When a component of a business has been discontinued during the year, this component's operating losses of the current period up to the measurement date should be included in the

• A) Income statement as part of the income (loss) from operations of the discontinued component
• B) Income statement as part of the loss on disposal of the discontinued component
• C) Income statement as part of the income (loss) from continuing operations
• D) Retained earnings statement as a direct decrease in retained earnings

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Definitions:

Dividends

Payments made by a corporation to its shareholders, often as a distribution of profits.

Operating Activities

Transactions and events related to the primary operations of a business, including revenue and expense activities.

Accounts Receivable

Funds that clients or customers are required to pay to a business for products or services delivered on credit.

Sales Revenues

The income received by a company from its sales of goods or services before any expenses are subtracted.