Choice "d" is correct. AICPA Accounting Research Bulletins, FASB Standards, FASB Interpretations,
FASB Staff Positions, FASB Statement 133 Implementation Issues, and APB Opinions and
Interpretations are the most authoritative sources of generally accepted accounting principles. Choice "a"
is incorrect. AICPA Statements of Position, AICPA Accounting and Auditing Guides, and FASB Technical
Bulletins are secondary sources of generally accepted accounting principles. Choice "b" is incorrect.
AICPA Statements of Position, AICPA Accounting and Auditing Guides, and FASB Technical Bulletins
are secondary sources of generally accepted accounting principles. Choice "c" is incorrect. AICPA Issues
Papers and Practice Bulletins, FASB Concepts Statements, and other authoritative pronouncements are
tertiary sources for generally accepted accounting principles.

Choice "d" is correct, these are two separate transactions because Gold Corp. (1) sold Iron Corp. bonds
(an investment) for a loss, and, (2) bought back its own (Gold) Corp. bonds (a debt) for a gain. This is not
a "refinancing" (where one would sell new bond debt to buy back old bond debt outstanding).
The gain from the purchase of its own bonds is an "extraordinary gain" because it is both unusual in
nature and infrequently occurring (per APB Opinion No. 30 and SFAS No. 145). The Iron Corp.
transaction is a loss in "income before extraordinary items."
Choices "a" and "b" are incorrect. The two transactions are separate and cannot be netted.
Choice "c" is incorrect. Just the opposite. The sale of the investment is a loss in "income before
extraordinary items," while the purchase of its bond debt is an "extraordinary gain" according to the
provisions of APB Opinion No. 30.

Choice "d" is correct. The concept of reliability in financial reporting includes; neutrality, representational
faithfulness and verifiability.
Choices "a", "b", and "c" are incorrect, per the above.

Choice "c" is correct. The monetary unit assumption means that money is the common denominator for
economic activity and provides an appropriate basis for accounting measurements and analysis. Choice
"a" is incorrect. The going concern assumption has nothing to do with money per se. The going concern
assumption presumes that an entity will continue to operate in the foreseeable future. Choice "b" is
incorrect. The periodicity has nothing to do with money per se. The periodicity assumption is that
economic activity can be divided into meaningful time periods. Choice "d" is incorrect. The economic
entity assumption has nothing to do with money per se. The economic entity assumption is that economic
activity can be accounted for when considering an identifiable set of activities.

Choice "c" is correct. The 20X3 loss from discontinued operations would include both the 20X3 operating
loss of $500,000 (which turned out to be a correct estimate) and the "additional" loss (on disposal) of
$ 100,000, net of tax, for a total of $600,000 x .70 or $420,000. Choice "a" is incorrect. It includes the 20X3
operating loss of $500,000 but not the $300,000 impairment loss but does report the 20X3 operating loss
net of tax. Choice "b" is incorrect. It includes the 20X3 operating loss of $500,000, but not the $100,000
loss on disposal, and reports the 20X3 operating loss gross of tax and not net of tax. Choice "d" is
incorrect. It reports the 20X3 loss from discontinued operations gross of tax and not net of tax. The 20X3
loss from discontinued operations should include both the 20X3 operating loss of $500,000 and the loss
on disposal of $100,000, net of tax, for a total of $600,000 x .70 or $420,000.