COMMERCE 1AA3 Study Guide - Quiz Guide: Tim Hortons, Cash Flow Statement, Corporate Social Responsibility
24 Oct 2018
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Question 1: four of your friends, already finished college, recently started a construction company in brantford, ontario. Unfortunately, two days prior to closing, a vicious tornado struck. Brantford, destroying 100 homes including the two homes owned by your friends. In addition, your friends were trying to save money and did not purchase any insurance to cover these types of losses. Define, compare and contrast the difference between discontinued operations and extraordinary items. Discontinued operations result from the disposal of a major segment of the business and are reported net of income tax effect. Extraordinary items - gain or losses that are considered unusual in nature, infrequent in occurrence, and not dependent primarily on decisions by management or owners. They are reported net of tax on the income statements. These items are presented separately because of their non-recurring nature and thus are not useful in predicting the future income of the company.
