The disposal of a significant component of a business is called
A)A change in accounting principle
B)An extraordinary item
C)An other expense
D)Discontinued operation

Question

Quizplus · Accepted Answer

The disposal of a significant component of a business is classified as a discontinued operation. A discontinued operation is a segment or a portion of a business that management has decided to dispose of, and it meets certain criteria outlined in accounting standards. The results from the disposal of a discontinued operation are reported separately on the income statement to help users of financial statements understand the impact of the disposal on the company's financial performance.

The Disposal of a Significant Component of a Business Is