Gains and Losses That Are Neither Unusual nor Infrequent Are

question 126

Multiple Choice

Gains and losses that are neither unusual nor infrequent are reported as:

• A)A separate line item when computing earnings per share.
• B)A prior period adjustment on the statement of retained earnings.
• C)A gain or loss from disposing of the discontinued segment's net assets.
• D)A gain or loss from operation of a discontinued segment.
• E)Part of continuing operations.

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Definitions:

Operating Cash Flow

The amount of cash generated by a company's regular business operations, indicating its ability to cover operational costs and investments.

Business Activities

Business activities encompass all actions undertaken by a company to produce goods, provide services, or otherwise create economic value.

Net Income

The final financial gain of a company, calculated by removing all expenses and taxes from the gross revenue.

Financial Leverage

The use of borrowed funds (debt) to finance the purchase of assets, with the expectation that the profits made from this investment will be greater than the interest payable.