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

a. a discontinued operation.

b. a line item between income from continuing operations and income from discontinued operations.

c. a line item within income from continuing operations.

d. a line item in the retained earnings statement.

Question

Tess

Business

9 March, 06:14

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

a. a discontinued operation.

b. a line item between income from continuing operations and income from discontinued operations.

c. a line item within income from continuing operations.

d. a line item in the retained earnings statement.

+4

Answers (1)

Know the Answer?

Emilio Curtis · Answer 1

Popson Inc. incurred a material loss that was unusual in character. This loss should be reported as: a line item within income from continuing operations.

Explanation:

Any income or loss that was incurred during the continuous operations of any segment of business or in the continuous operations of any segment of business will be either represented as after tax gain or loss on selling the business segment and the after tax effect of the operations of the discontinued business segment.

The areas such as expenses, revenues, loss and gain and those excluding the operation discontinued and extra ordinary items will included as the income from continuing operations. In the example given, the company has material loss during its operations and hen it should be reported as a line item within income from continuing operations.