Which of the Following Is Not Subtracted to Arrive at Operating

question 145

Multiple Choice

Which of the following is not subtracted to arrive at operating profit?

• A) Interest expense
• B) Cost of goods sold
• C) Amortization
• D) Selling and administration expense

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Definitions:

Insolvent

A state in which an individual or entity cannot meet their financial obligations as debts come due, often leading to bankruptcy proceedings.

Redemption

The act of buying back something that was previously sold, or the act of fulfilling a promise.

Indebtedness

The condition of owing money or being under financial obligation to another entity.

Accumulated Earnings

Profits that a company retains for reinvestment rather than distributing to shareholders as dividends.