Which of the following is true with respect to extraordinary items?

I. Extraordinary items are recorded net of tax in income statement.
II. Extraordinary items, by definition, are probable and unusual in nature.
III. By definition, gains and losses from strikes are always extraordinary.
IV. By definition, gains and losses from sale of property, plant and equipment are never extraordinary.

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

Question

Which of the following is true with respect to extraordinary items?

I. Extraordinary items are recorded net of tax in income statement.
II. Extraordinary items, by definition, are probable and unusual in nature.
III. By definition, gains and losses from strikes are always extraordinary.
IV. By definition, gains and losses from sale of property, plant and equipment are never extraordinary.

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

Quizplus · Accepted Answer

I is true - extraordinary items are recorded net of tax in income statement. 
II is false - extraordinary items, by definition, are both unusual in nature and infrequent in occurrence (not probable).
III is false - gains and losses from strikes are not always extraordinary, it depends on the specifics of the situation.
IV is true - gains and losses from sale of property, plant and equipment are never considered extraordinary as they are a normal part of business operations.

Which of the Following Is True with Respect to Extraordinary