What is a "component" of an entity?
A)A division of an entity that either has been disposed of or is classified as held for sale.
B)A group of assets and liabilities to be disposed of together in a single transaction.
C)A component with operations and cash flows distinguishable from the rest of the entity.
D)A group of non-current assets that have been disposed or are classified as held for sale.

Question

Quizplus · Accepted Answer

A component of an entity is a part of the entity that has its own operations and cash flows that can be clearly distinguished from the rest of the entity. This can include a separate business unit or a line of business within the entity. Options A, B, and D relate to disposals or classifications of groups of assets and liabilities, but do not necessarily meet the definition of a component of an entity.

What Is a "Component" of an Entity