A transaction that is unusual in nature and infrequent in occurrence should be reported separately as a component of income:
Choice 'd' is correct. An extraordinary item (a transaction that is both 'unusual in nature' and 'infrequent in occurrence') should be reported separately as a component of income after discontinued operations of a segment of a business.
The cumulative effect of a change in accounting principle is shown on the retained earnings statement.
This is why memorizing the mnemonic 'idea' is so important.
Currently there are no comments in this discussion, be the first to comment!