GAAP Requires That Each Set of EPS Numbers Includes Separately

question 126

Multiple Choice

GAAP requires that each set of EPS numbers includes separately reported numbers for all of the following except

• A)special or unusual items.
• B)income from continuing operations.
• C)discontinued operations.
• D)extraordinary items.

---

Definitions:

Break-Even Level

The point at which total revenues equal total expenses, and the business neither makes a profit nor incurs a loss.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Variable Cost

A cost that changes in proportion to the level of production or business activity.

Contribution Margin Ratio

The percentage of each sale that contributes to covering fixed costs after variable costs have been paid.