Zebra Company sells a segment of its operations at a loss. Zebra has not previously experienced such an event and does not expect to again.
The loss from the disposal of the segment should be reported in the income statement as:
A) A separate amount in comprehensive income
B) A separate amount in a discontinued operations section
C) A separate amount in net income from continuing operations
D) As part of cost of goods sold

Question

Quizplus · Accepted Answer

The loss from the disposal of a segment of operations should be reported in the income statement as a separate amount in a discontinued operations section, especially if the disposal represents a strategic shift that has (or will have) a major effect on the company's operations and financial results.

Zebra Company Sells a Segment of Its Operations at a Loss