Which of the following is true?
The results of operations of a component of an entity that either has been disposed of or classified as held for sale shall be reported in discontinued operations if:
I.The operations and cash flows of the component have been or will be eliminated from the ongoing operations of the entity as a result of the disposal transaction.
II.The entity continues to have a significant continuing involvement in the operations of the component after the disposal transaction.
III.The entity outsources the manufacturing operations of a component and sells the manufacturing facility of the component but continues to sell the product formerly manufactured by the facility sold.
A)I, II, and III are all true.
B)I and II are true, but III is not.
C)Only II is true.
D)Only I is true.

Question

Quizplus · Accepted Answer

The results of operations of a component can be reported in discontinued operations if the operations and cash flows of the component have been or will be eliminated from the ongoing operations of the entity, which is true for statement I. Statement II is false because significant continuing involvement would not qualify for discontinued operations. Statement III is false because outsourcing and continuing to sell the product does not eliminate the operations and cash flows.

Which of the Following Is True