Popson Inc. incurred a material loss that was unusual in character. This loss should be reported as:

Question

Quizplus · Accepted Answer

According to GAAP (Generally Accepted Accounting Principles), unusual items should be reported as a separate line item within income from continuing operations. Discontinued operations are events/activities that are expected to significantly impact the company's financial performance in the future, and a material loss is not necessarily equivalent to discontinuing operations. The retained earnings statement only reports changes in the retained earnings account, so it is not the appropriate place to report the loss.