Which of the following items would qualify as an extraordinary item?
A)Loss due to earthquake damage to a warehouse in San Francisco, California
B)Loss due to hurricane damage to a building in Toronto, Ontario
C)Loss due to hurricane damage to a hotel in Miami, Florida
D)Loss due to flood damage to a store in New Orleans, Louisiana

Question

Quizplus · Accepted Answer

Extraordinary items are both unusual in nature and infrequent in occurrence, considering the environment in which the entity operates. Hurricanes are common in Miami, Florida, and floods are common in New Orleans, Louisiana, so losses from such events in these locations would not be considered extraordinary. Earthquakes are relatively rare in San Francisco but might not be considered extraordinary given the region's history with such events. However, hurricanes are extremely rare in Toronto, Ontario, making a loss due to hurricane damage there both unusual and infrequent, thus qualifying as an extraordinary item.

Which of the Following Items Would Qualify as an Extraordinary