Question

Losses from major strikes by employees are reported in extraordinary items, net of tax.

a-true
b-false

Answer 1

Losses from major strikes by employees are not reported as extraordinary items on financial statements; this is false.

Step-by-step explanation:

The correct answer to the question is false. According to the accounting standards, losses from major strikes by employees are not reported as extraordinary items. The term extraordinary items used to be a classification in financial reporting for events and transactions that were distinct and unusual in nature and infrequent in occurrence. However, this classification has been eliminated under Generally Accepted Accounting Principles (GAAP) in the United States and is not used under International Financial Reporting Standards (IFRS). Instead, such losses should now be included within operating income or loss and disclosed in the notes to the financial statements if they are material.