Discuss AICPA CPA-Financial Exam Topic 2 Question 98

A segment of Ace Inc. was discontinued during 1992. Ace's loss from discontinued operations should not:

AInclude employee relocation costs associated with the decision to dispose.

BExclude operating losses from the date the decision to dispose of the segment was made until the end of 1992.

CInclude additional pension costs associated with the decision to dispose.

DInclude operating losses of the current period up to the date the decision to dispose of the segment was made.

Suggested Answer: B

Choice 'b' is correct. $120,000 expense included in the determination of net income or loss for the sixmonth interim period ended June 30, 1991.

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34 comments · newest first

Shalon 10 months ago

D is just standard practice, nothing surprising there.

Annabelle 11 months ago

B is a tricky one, but I think it makes sense to exclude those losses.

Clorinda 11 months ago

Surprised that employee relocation costs aren't counted!

Elliott 11 months ago

I disagree, I think C should be included too.

Lashawn 11 months ago

A is definitely correct, those costs shouldn't be included.

Jesusa 12 months ago

I feel like operating losses up to the decision date should be included, but I’m not completely confident. I wish I had reviewed that part more thoroughly.

Anthony 12 months ago

I practiced a similar question where we had to determine what costs to include or exclude. I think employee relocation costs might be one of those that shouldn’t be included.

Louvenia 12 months ago

I’m a bit unsure about the timing of the losses. I think we might need to exclude losses from before the decision was made, but I can't recall the exact details.

Mabelle 1 year ago

I remember we discussed how discontinued operations should only reflect losses directly tied to the segment's closure. I think that might rule out some costs.

Keva 1 year ago

This is a tricky one, but I'm going to make an educated guess. I'll review my notes on discontinued operations to see if that helps me narrow it down.

Audria 1 year ago

I'm pretty confident I know the right answer here. The question is asking what should not be included, so I'll eliminate the options that should be included.

Arlette 1 year ago

Hmm, I'm a bit confused by the wording here. I'll need to re-read the question and options carefully to make sure I don't miss any important nuances.

Portia 1 year ago

This seems like a straightforward accounting question, but I want to make sure I understand the key details before selecting an answer.

Janessa 1 year ago

Okay, I think I've got it. The key is to identify what should not be included in the loss from discontinued operations. Let me think this through step-by-step.

Willetta 1 year ago

This question is making my brain hurt more than the time I tried to balance a chemical equation. But hey, at least it's not asking about quantum physics!

Stefanie 1 year ago

↳ replying to Willetta

C) Include additional pension costs associated with the decision to dispose.

Thurman 1 year ago

↳ replying to Willetta

B) Exclude operating losses from the date the decision to dispose of the segment was made until the end of 1992.

Daniel 1 year ago

↳ replying to Willetta

A) Include employee relocation costs associated with the decision to dispose.

Craig 1 year ago

Hmm, I'm leaning towards C. Additional pension costs seem like they should be part of the loss, doesn't it? Unless we're trying to downplay the whole thing.

Leonardo 1 year ago

I'm going with D. Gotta include those operating losses up to the date of the decision, right? Otherwise, it's like sweeping the past under the rug.

Veronika 1 year ago

↳ replying to Leonardo

Yeah, D is the way to go. It's important to include those operating losses in the calculation.

Daisy 1 year ago

↳ replying to Leonardo

I agree, D seems like the most logical choice. We need to consider all the losses up to the disposal decision.

Xochitl 1 year ago

↳ replying to Leonardo

I think you're right, D makes sense. We shouldn't ignore those operating losses.

Christiane 1 year ago

Wait, are we supposed to include employee relocation costs or not? This question is giving me a headache.

Reta 1 year ago

↳ replying to Christiane

D) Include operating losses of the current period up to the date the decision to dispose of the segment was made.

Clorinda 1 year ago

↳ replying to Christiane

C) Include additional pension costs associated with the decision to dispose.

Dan 1 year ago

↳ replying to Christiane

B) Exclude operating losses from the date the decision to dispose of the segment was made until the end of 1992.

Linette 1 year ago

↳ replying to Christiane

A) Include employee relocation costs associated with the decision to dispose.

Lisbeth 2 years ago

I think the answer is B. The operating losses from the date the decision to dispose of the segment was made until the end of 1992 should be excluded, not included.

Garry 1 year ago

↳ replying to Lisbeth

Yes, it makes sense to exclude those losses from the discontinued segment.

Lelia 1 year ago

↳ replying to Lisbeth

I agree, the operating losses during that period should be excluded.

Chan 2 years ago

I disagree. I think the loss should include all operating losses up to the date of disposal.

Giuseppe 2 years ago

I agree with Sherill. It should also exclude operating losses after the decision to dispose.

Sherill 2 years ago

I think the loss should not include employee relocation costs.

AICPA CPA-Financial Exam - Topic 2 Question 98 Discussion