Which of the following items should be classified as an extraordinary item on a corporate income statement?
A) gain on the retirement of a bond payable
B) gain from land condemned for public use
C) loss due to an discontinued operation
D) selling treasury stock for more than the company paid for it

Question

Quizplus · Accepted Answer

The gain from land condemned for public use is an unusual and infrequent event that is outside of the company's normal operations, and therefore qualifies as an extraordinary item. The other items listed do not meet the criteria for classification as an extraordinary item. (A) is a gain on a bond payable, which is a normal part of the company's operations. (C) refers to a loss from a discontinued operation, which is a separate category on the income statement. (D) is a gain from the sale of treasury stock, which is also a normal part of the company's operations.

Which of the Following Items Should Be Classified as an Extraordinary