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An extraordinary item should be reported separately on the income statement as a component of income:
Suggested Answer: B
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Choice 'b' is correct, Yes - No. An extraordinary item should be reported separately on the income statement as a component of income:
Yes - net of income taxes.
No - after (not before) 'discontinued operations of a segment of a business.'
12 comments · newest first
VE
Verona
3 days ago
Option A makes sense. Extraordinary items need visibility.
BA
Barney
8 days ago
Agreed! It highlights significant events.
MA
Maddie
13 days ago
I think it should be reported separately. Clarity is key.
AL
Alonzo
18 days ago
Option A is definitely the right choice!
BE
Bettina
23 days ago
I thought they were just included in regular income.
QU
Quentin
28 days ago
Wait, are we sure about that? Seems a bit off.
KI
King
1 month ago
Totally agree, it's crucial for transparency.
GL
Glory
1 month ago
Extraordinary items must be reported separately!
SH
Sharee
1 month ago
I remember something about how extraordinary items should be infrequent and unusual, but I’m not sure how that applies to this question.
CE
Celeste
2 months ago
I’m a bit confused about the definition of extraordinary items. Are they still considered separate after the recent changes in accounting standards?
TA
Talia
2 months ago
I recall a practice question where we had to identify extraordinary items, and I think they were reported net of tax. Is that relevant here?
MY
Myra
2 months ago
I think extraordinary items are supposed to be shown separately, but I can't remember if they go above or below the operating income line.