Which of the Following Items Is Consistent with Earnings Being

question 71

Multiple Choice

Which of the following items is consistent with earnings being informative about current performance and informing the analyst that level of current earnings are not sustainable?

• A) The firm recognizes an unexpected gain
• B) The firm recognizes a fair value gain on a financial asset as a result of a favorable move in interest rates.
• C) The firm recognizes additional expenses this period due to pre-opening costs associated with new stores.
• D) The firm experiences a large jump in sales and earnings as a result of successful research and development of new products.

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Definitions:

Occupational Licensing

The laws of state or local governments that require that a worker satisfy certain specified requirements and obtain a license from a licensing board before engaging in a particular occupation.

Antitrust Legislation

Laws and regulations designed to promote competition and prevent monopolies or oligopolies by regulating anticompetitive practices among companies.

American Dream

The ideal that every US citizen should have an equal opportunity to achieve success and prosperity through hard work, determination, and initiative.

Political Appointments

Positions given within the government based on political affiliation or support rather than through a merit-based or competitive process.