Which of the following should be reported net of the related income tax effect on the income statement?
A) sale of an inventory item at a loss
B) loss due to sale of fixed assets
C) loss due to a discontinued operations of the business
D) sale of a temporary investment at a loss

Question

Quizplus · Accepted Answer

Loss due to discontinued operations of the business should be reported net of the related income tax effect on the income statement. This is because it is a significant event that is not considered part of the company's regular operations and is not expected to occur in the future. The income tax effect should be taken into account to accurately reflect the impact on the company's overall financial performance. The other options (sale of an inventory item at a loss, loss due to sale of fixed assets, sale of a temporary investment at a loss) do not require reporting net of the related income tax effect on the income statement.

Which of the Following Should Be Reported Net of the Related