Which of the following should be reported net of the related income tax effect on the income statement?

Question

Quizplus · Accepted Answer

Loss due to a discontinued segment of a business should be reported net of the related income tax effect on the income statement because the tax effect is directly related to the loss.

Answer: B, D
 Sale of a temporary investment at a loss and Sale of an inventory item at a loss should not be reported net of the related income tax effect on the income statement because the tax effect is an indirect result of the loss and should be reported separately as a tax expense.

Answer: C
 Loss due to shoplifting should not be reported net of the related income tax effect on the income statement because it is not a tax-deductible expense.

Which of the Following Should Be Reported Net of the Related