When the disposal of a significant business component occurs, the income statement should report the profit (or loss) from this event as
A) other revenue or expense.
B) cost of goods sold.
C) discontinued operations, before tax.
D) discontinued operations, net of tax.

Question

Quizplus · Accepted Answer

Discontinued operations are reported separately in the income statement, net of tax, to distinguish them from the results of continuing operations. This allows users of financial statements to assess the impact of discontinuing a part of the business on the company's financial position and performance.

When the Disposal of a Significant Business Component Occurs, the Income