Which of the Following Best Describes Discontinued Operations on the Income

question 14

Multiple Choice

Which of the following best describes discontinued operations on the income statement?

• A)The gains and losses from transactions that are not part of the normal operations of the business
• B)The profit or loss generated from the normal operations of the business
• C)The profit or loss from segments of the business that have been sold or terminated
• D)The profit or loss generated from unusual or infrequent events

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Definitions:

Equity Multiplier

A ratio of financial leverage that calculates the proportion of a company's assets funded by its shareholders' equity.

Total Assets Turnover Ratio

Measures the turnover of all the firm’s assets; it is calculated by dividing sales by total assets.

Debt Ratio

A financial ratio that measures the extent of a company’s or individual's leverage, calculated by dividing total liabilities by total assets.

Window Dressing

Techniques employed by firms to make their financial statements look better than they really are.