Which of the following items should be classified as an extraordinary item on an income statement?
A) gain on the retirement of a bond payable
B) loss from hurricane damage in Iowa
C) loss due to a discontinued operation in Colorado
D) selling treasury stock for more than the company paid for it

Question

Quizplus · Accepted Answer

Hurricane damage is an unusual and infrequent event that is outside of the company's normal business operations, making it an extraordinary item. The gain on the retirement of a bond payable and the sale of treasury stock for more than the company paid for it may be gains, but they are not unusual or infrequent events. The loss from a discontinued operation in Colorado may be extraordinary, but more information would be needed to determine that.

Which of the Following Items Should Be Classified as an Extraordinary