For an event or transaction to be classified as an extraordinary item in the income statement, it should be
A)infrequent and material, but it need not be unusual in nature
B)unusual in nature and material, but it need not be infrequent
C)unusual in nature, infrequent, and material
D)unusual in nature and infrequent, but it need not be material

Question

Quizplus · Accepted Answer

According to Accounting Standard Codification 225, an event or transaction can be classified as an extraordinary item in the income statement if it is unusual in nature, infrequent, and material. Therefore, choice C is the correct answer as it includes all three criteria. Choices A, B, and D miss out on one or more of the required criteria.

For an Event or Transaction to Be Classified as an Extraordinary