Multiple choice

Which of the following is/are extraordinary item(s)?

  1. Insurance claim received on loss of stock by fire

  2. Loss of land and building due to earthquake

  3. Profit or loss on sale of shares held as investments

  4. Profit or loss due to foreign exchange rates fluctuations

  5. Both 1 and 2
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

As per AS - 5 net profits, prior period Items and changes in accounting policies issued by the ICAI, the extraordinary items are those items, which are incomes or expenses that we do not expect to re-occur in future. The insurance claim received on loss of stock by fire, and the loss of land and building due to earthquake are extraordinary items.

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