An Item That Should Be Classified as an Extraordinary Item

question 64

Multiple Choice

An item that should be classified as an extraordinary item is

• A) write-off of goodwill.
• B) gains from transactions involving foreign currencies.
• C) losses from moving a plant to another city.
• D) gains from a company selling the only investment it has ever owned.

Analyze the impact of business transactions on liquidity ratios.

Understand the significance of liquidity ratios to various stakeholders such as suppliers and short-term creditors.

Calculate and interpret inventory turnover and days in inventory.

Understand the implications of financial leverage on company solvency and profitability.

---

Definitions:

Value Meal

A marketing strategy that bundles meal components at a reduced price compared to purchasing them separately.

Economizing Behavior

Choosing the option that offers the greatest benefit at the least possible cost.

Lowest Priced Item

The item with the least cost among a selection of goods, often highlighted in sales or comparative shopping.

Economic Way

An approach to understanding human behavior and decision-making within an economic framework of scarcity and resource allocation.