Lee's Lions had to shut down its store in Houston.There was no buyer,so Lee's Lions sold the store equipment and closed out the business at a loss.This loss would be reported on the income statement as part of ________.
A)continuing operations
B)discontinued operations
C)extraordinary items
D)other revenues and expenses

Question

Quizplus · Accepted Answer

The closure of the store constitutes as discontinued operations, which is when a company ceases operations of a component of its business and it meets certain criteria, such as being a strategic shift that has a major effect on the company's operations and financial results. The loss from this event would be reported separately on the income statement as part of discontinued operations.

Lee's Lions Had to Shut Down Its Store in Houston