The discontinued operations section of the income statement refers to
A)discontinuance of a product line.
B)the profit or loss on products that have been completed and sold.
C)sale of obsolete equipment and discontinued inventory items.
D)the disposal of a major line of business or major geographical area of operations.

Question

Quizplus · Accepted Answer

The discontinued operations section of the income statement refers to the disposal of a major line of business or major geographical area of operations. This section reports the profit or loss from the disposal and is separated from the continuing operations of the business. Choice A refers to regular product line changes and would not be reported as a discontinued operation. Choice B refers to the normal sales revenue and would be included in the operating section of the income statement. Choice C refers to the sale of obsolete equipment and inventory items, which would be reported as a gain or loss in the operating section of the income statement.

The Discontinued Operations Section of the Income Statement Refers to