Question

18.) Setting up a "cookie jar" reserve is perfectly acceptable and can be reversed when additional income is needed. True False

Answer 1

2) True, the intra oeriod tax allocation associated with a gain from discontinued operations will result in a tax expense which reduces net income. Is the correct answer

3) False, because acompany may report discontinued operations under GAAP as long as two conditions are met. First, the transaction to shut down the divested business will result in eliminating the operations and cash flows of the divested business from company operations. Second, once it has been discontinued, the closed business must have no significant ongoing involvement with its operations