In an effort to concentrate its resources in more profitable areas, Southern Ste

Question

In an effort to concentrate its resources in more profitable areas, Southern Steel Corporation recently sold its family pizza restaurant segment. The disposal constitutes:

A.   an extraodinary item.
B.   a discontinued operation which should be treated as a prior period adjustment.
C.   a discontinued operation which should be disclosed net-of-tax effects.
D.   a portion of income from continuing operations.
E.   None of these. Which of the following events are considered as extraordinary by the accounting profession?

A.   Write-down or write-off of receivables, inventories, and intangible assets.
B.   Gains and losses on the disposal of a business segment.
C.   Gains and losses from the sale or abandonment of property, plant, and equipment.
D.   Effects of a strike, including those against competitors and major suppliers.
E.   None of these. In an effort to concentrate its resources in more profitable areas, Southern Steel Corporation recently sold its family pizza restaurant segment. The disposal constitutes:

A.   an extraodinary item.
B.   a discontinued operation which should be treated as a prior period adjustment.
C.   a discontinued operation which should be disclosed net-of-tax effects.
D.   a portion of income from continuing operations.
E.   None of these. Which of the following events are considered as extraordinary by the accounting profession?

A.   Write-down or write-off of receivables, inventories, and intangible assets.
B.   Gains and losses on the disposal of a business segment.
C.   Gains and losses from the sale or abandonment of property, plant, and equipment.
D.   Effects of a strike, including those against competitors and major suppliers.
E.   None of these.

Explanation / Answer

D.   a portion of income from continuing operations

2)

D.   Effects of a strike, including those against competitors and major suppliers.

becuase strikes are not the regular part of business it does not hppen every day. So it i an extra ordinary item.

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