Q19RQ - Horngren'S Financial And Managerial Accounting

Question

What is reported in the discontinued operations section of the income statement?

Step-by-Step Solution

Answer

Discontinued operations ought to be accounted on the income statement: net tax underneath income from continuing operations.

Step 1: Introduction to topic-

Discontinued operations are required to be recorded differently in the statement. These operations and activities are important to the investors of the company and helps in analysing the overall profits and the cash flows. 

Step 2: The discontinued operations section of the income statement-

These operations depicts the activities that were an important part of the company but has been stopped or closed. These are segregated from the ongoing activities.