Which of the following would be classified as an extraordinary item on the income statement?
A)Loss on disposal of a segment of business
B)Cumulative effect of a change in accounting principle
C)A sale of land
D)An error correction that relates to a prior year
E)A loss from a flood in a location that would not be expected to flood

Question

Quizplus · Accepted Answer

An extraordinary item is an event that is unusual in nature, infrequent in occurrence, and material in amount. The loss from a flood in a location that would not be expected to flood meets these criteria and would therefore be classified as an extraordinary item on the income statement. None of the other options meet all three criteria for an extraordinary item.

Which of the Following Would Be Classified as an Extraordinary