Extraordinary items occur when
A)a company sells an entire segment of the business.
B)an event is unusual in nature but not infrequent in occurrence
C)an event is infrequent in occurrence but not unusual in nature
D)the event is unusual in nature and infrequent in occurrence.
E)a company records an impairment loss on goodwill.

Question

Quizplus · Accepted Answer

An extraordinary item is defined as an event that is both unusual in nature and infrequent in occurrence. It is a non-recurring event that is not related to the ordinary business activities of the company. Examples of extraordinary items include natural disasters, expropriation of company assets, and significant write-offs or losses. Selling an entire segment of the business or recording an impairment loss on goodwill are not necessarily considered extraordinary items unless they meet the criteria of being both unusual in nature and infrequent in occurrence.

Extraordinary Items Occur When