AS 24 - Discontinuing Operations MCQ

Question 1

1. AB decided to dispose of its Clothing division as part of its long-term strategy.

A) Date of Board approval - 1st March 20X1;

C) Date of Binding Sale agreement – 1st July 20X1;

D) Reporting date – 31st March 20X1 The date of initial disclosure event would be: (a) 1st March 20X1 (b) 15th March 20X1

Answer

B) Date of formal announcement made to affected parties - 15th March 20X1. ✓

Question 2

2. To qualify as a component that can be distinguished operationally and for financial reporting purposes, the condition(s) to be met is (are):

A) The operating assets and liabilities of the component can be directly attributed to it.

B) Its revenue can be directly attributed to it.

C) At least a majority of its operating expenses can be directly attributed to it.

Answer

D) All of the above ✓

Question 3

3. Identify which of the following statements is incorrect?

A) A discontinuing operation is a component of an enterprise that represents a separate major line of business or geographical area of operations.

B) A discontinuing operation is a component of an enterprise that can be distinguished operationally and for financial reporting purposes.

D) A discontinuing operation may be disposed of in its entirety or piecemeal, but always pursuant to an overall plan to discontinue the entire component.

Answer

C) A discontinuing operation is a component of an enterprise that may or may not be distinguished operationally and for financial reporting purposes. ✓

AS 24 - Discontinuing Operations MCQ

Sample Questions: AS 24 - Discontinuing Operations