Which Items Bypass the Profit Figure Under the Operating-Profit Approach

question 1

Multiple Choice

Which items bypass the profit figure under the operating-profit approach?

• A) Revenues and expenses resulting from changes in accounting policies
• B) Revenue and expenses relating to prior periods
• C) Revenues and expenses relating to events outside the ordinary operations of the entity
• D) All of the above

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Definitions:

Restraint of Trade

A legal concept that seeks to enforce reasonable limitations on business practices to encourage competition and prevent monopolies.

Federal Trade Commission Act

A United States federal law established in 1914 to prevent unfair or deceptive business practices, including antitrust violations.

Lanham Act

A United States federal statute that governs trademarks, service marks, and unfair competition, providing guidelines for the registration and legal protection of brands.

Regulatory Forces

External rules and regulations imposed by governing bodies that affect how businesses operate and interact with customers.