A business incurs a loss from a hurricane. It is the first time the business has had a loss from such an event. This loss would probably be classified on an income statement as an:

Question

Quizplus · Accepted Answer

An extraordinary item is an event or transaction that is both unusual in nature and infrequent in occurrence, and its impact on the business is material. Since the loss from a hurricane is not a regular occurrence for the business and its impact on the income statement is significant, it meets the criteria to be classified as an extraordinary item.

A Business Incurs a Loss from a Hurricane