Unusual and Infrequent Transactions: Reporting as Component of Income

Unusual and Infrequent Transactions

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Question

A transaction that is unusual in nature and infrequent in occurrence should be reported separately as a component of income

Answers

A. after cumulative effect of accounting changes and after discontinued operations of a segment of a business.

B. before cumulative effect of accounting changes and before discontinued operations of a segment of a business.

C. after cumulative effect of accounting changes and before discontinued operations of a segment of a business.

D. before income from continuing operations.

E. before cumulative effect of accounting changes and after discontinued operations of a segment of a business.

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Explanations

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A. B. C. D. E.

A transaction that is unusual and infrequent is classified as an extraordinary item. The following is the order of items to be reported separately in the income statement: income from continuing operations, discontinued operations, extraordinary items, cumulative effect of changes in accounting principle, and net income.

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