Which One of the Following Is an Example of Sustainable

question 46

Multiple Choice

Which one of the following is an example of sustainable earnings? 

• A) A gain from corporate restructuring.
• B) A loss from debt retirement.
• C) A settlement paid by the company for a class action suit.
• D) Earnings from repeat customers.

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Definitions:

Note Proceeds

The amount of money received by a borrower from the lender when a note is issued; essentially the principal amount of the loan.

Debt Restructuring

A financial process where the terms of existing debts, such as the interest rate or payment schedule, are altered to provide relief to the borrower.

Common Stock

A type of security that represents ownership in a corporation, entitling holders to vote on corporate matters and receive dividends.

Extraordinary Gain

Income from events that are both unusual in nature and infrequent in occurrence, excluded from regular business operations when assessing profitability.