Question Details

When the disposal of a significant segment occurs


TRUE-FALSE STATEMENTS
1. Earning power refers to a company- ability to sustain its profits from operations.
2. When the disposal of a significant segment occurs, the income statement should report both income from continuing operations and income (loss) from discontinued operations.
3. An event or transaction should be classified as an extraordinary item if it is unusual in nature or if it occurs infrequently.
4. If a firm has only one change in accounting principle over several years, it would be classified on the income statement as an extraordinary item.
5. A change in accounting principle occurs when the principle used in the current year is different from the one used by competitors in the current year.



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