PROBLEMS (Part 3)

Problem 33-8 Multiple choice (AICPA Adapted)

1. When a component of an entity was discontinued during the year, the loss

on discontinued operation should.

a. Exclude the associated employee relocation cost.

b. Exclude operating loss for the period

с. Include associated employee termination cost.

d. Exclude associated lease cancelation cost.

2. When an entity decided to sell a business component, the gain on the

disposal should be

a. Presented as other income

b. Presented as an adjustment to retained earnings

c. Netted against the loss from operations of the component as a part of discontinued

operations.

d. Included in other comprehensive income

3. When a component of a business has been discontinued during the year,

the loss on discontinued operations should

a. Include operating loss of the current period

b. Exclude operating loss during the period

c. Be classified an extraordinary item. d. Be classified an operating item.

4. When a component of a business has been discontinued during the year,

the operating loss of the component for the current year should be included

in

a. Income statement as part of revenue and expenses.

b. Income statement as part of the loss on the discontinued operation.

c. Income from continuing operations

d. Retained earnings
5. When an entity discontinued an operation, the transaction should be

reported as

a. A prior period error

b. Other income and expense item

c. An amount after income from continuing operations and before net income

d. Bulk sale of assets included in income from continuing operations.