GAAP requires two items be shown on the income statement after income tax expense.The correct order of presentation is:
A)Extraordinary items and discontinued operations
B)Discontinued operations and unusual items
C)Discontinued operations and extraordinary items
D)Extraordinary items and infrequent items

Question

Quizplus · Accepted Answer

GAAP requires that discontinued operations be presented on the income statement after income tax expense. Additionally, if there are any extraordinary items, they should also be presented after income tax expense but before discontinued operations. Therefore, the correct order of presentation is discontinued operations, followed by extraordinary items if applicable.

GAAP Requires Two Items Be Shown on the Income Statement