When a company discontinues an operation and disposes of the discontinued operation (component), the transaction should be included in the income statement as a gain or loss on disposal reported as
A)a prior period adjustment.
B)an other income and expense item.
C)an amount after continuing operations and before net income.
D)a bulk sale of plant assets included in income from continuing operations.

Question

Quizplus · Accepted Answer

When a company discontinues an operation, the gain or loss on disposal is reported separately from continuing operations, after income from continuing operations and before net income, to provide clear information about the results of discontinued operations.

When a Company Discontinues an Operation and Disposes of the Discontinued