Which of the following is not an extraordinary item?

I. Loss on abandonment of property
II. Gain on disposal of a business segment
III. Effect of a strike against a key supplier
IV. Write-down of deferred research and development costs

A)I and III
B)II and IV
C)I, II, and III
D)I, II, III, and IV

Question

Which of the following is not an extraordinary item?

I. Loss on abandonment of property
II. Gain on disposal of a business segment
III. Effect of a strike against a key supplier
IV. Write-down of deferred research and development costs

A)I and III
B)II and IV
C)I, II, and III
D)I, II, III, and IV

Quizplus · Accepted Answer

Extraordinary items are events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. According to accounting standards, items such as loss on abandonment of property, gain on disposal of a business segment, effect of a strike against a key supplier, and write-down of deferred research and development costs do not qualify as extraordinary items because they do not meet both criteria (unusual nature and infrequency of occurrence) to a high degree. These are considered more routine or operational in nature.

Which of the Following Is Not an Extraordinary Item