If the sale of an investment in a subsidiary is deemed to be a disposal of a component of the entity, the appropriate accounting treatments for the results its operations for the period and the gain or loss on the sale are: Results of Operations for the Period Gain or Loss on the Sale
A)Normal recurring operations Extraordinary item
B)Discontinued operations Discontinued operations
C)Normal recurring operations Normal recurring operations
D)Normal recurring operations Discontinued operations

Question

If the sale of an investment in a subsidiary is deemed to be a disposal of a component of the entity, the appropriate accounting treatments for the results its operations for the period and the gain or loss on the sale are: Results of Operations for the Period Gain or Loss on the Sale
A)​Normal recurring operations Extraordinary item
B)​Discontinued operations Discontinued operations
C)​Normal recurring operations Normal recurring operations
D)​Normal recurring operations Discontinued operations

Quizplus · Accepted Answer

When the sale of an investment in a subsidiary is considered a disposal of a component of the entity, the results of its operations for the period and the gain or loss on the sale are both classified as discontinued operations according to accounting standards. This classification helps users of financial statements distinguish the results of ongoing operations from those of components that have been disposed of.

If the Sale of an Investment in a Subsidiary Is