Which of the Following Is True About a Pro Forma

question 10

Multiple Choice

Which of the following is true about a pro forma earnings number?

• A) A pro forma earnings number is in total conformity with GAAP.
• B) A pro forma earnings number is a forecast of earnings in future periods.
• C) Reporting pro forma earnings by companies subject to SEC regulation is illegal.
• D) A pro forma earnings number is regular GAAP earnings with certain exclusions.

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Definitions:

Ratio Scale

A scale where there is a true zero point, allowing for the measurement of ratios between data points.

Proportion

A statistical measure expressing the fraction of a quantity within a whole.

Sample

A subset of a population selected for measurement, observation, or questioning to provide statistical information about the population.

Sample

A group of people or objects chosen from a broader group to conduct statistical studies.