A transaction that is material in amount, unusual in nature, but not infrequent in occurrence should be presented separately as a (an)
A) Component of income from continuing operations, but not net of applicable income taxes
B) Component of income from continuing operations, net of applicable income taxes
C) Extraordinary item, net of applicable income taxes
D) Prior period adjustment, but not net of applicable income taxes

Question

Quizplus · Accepted Answer

A material transaction that is unusual in nature but not infrequent in occurrence should be presented as a component of income from continuing operations, but it should not be net of applicable income taxes. This treatment is in line with Generally Accepted Accounting Principles (GAAP) and ensures that investors and analysts can evaluate the company's ongoing operations separately from any unusual and non-recurring items.

A Transaction That Is Material in Amount, Unusual in Nature