When a company disposes of a discontinued operation (segment), the transaction should be included in the income statement as a gain or loss on disposal reported as
A)a prior period adjustment.
B)other comprehensive income.
C)an amount after continuing operations.
D)a bulk sale of plant assets included in income from continuing operations.

Question

Quizplus · Accepted Answer

The gain or loss on disposal of a discontinued operation should be reported separately after continuing operations on the income statement. This is because the disposal of a segment is not part of the ongoing operations of the company and is therefore not included in the results of continuing operations. The gain or loss should not be reported as a prior period adjustment, other comprehensive income, or as part of the income from continuing operations.

When a Company Disposes of a Discontinued Operation (Segment), the Transaction