Question

PART A:

Which of the following are commonly excluded from non-GAAP income-related metrics presented in 10-K or 10-Q reports?

Multiple Choice

• Salaries paid to top executives

• Interest, taxes, depreciation, and amortization

• Accrual related to contingent losses

• Write-offs related to obsolete inventory

PART B

Acquiring controlling interest in another company represents a(n)

Multiple Choice

• correction of error.

• change in accounting estimate.

• change in accounting principle.

• change in entity.

Answer 1

Solution:

Part A

The correct answer is Write-offs related to obsolete inventory

Non-GAAP income related matrics typicallu excludes One time transactions, such as Asset write downs and organizational restructuring etc

So write -offs related to obsolete inventory is the correct answer.

Part B

The correct answer is change in entity.

Acquiring controlling interest in another company reprents Acquisition means acquiring another entity or merging with another entity make changes original entity's ownership , its capital structure etc.

So Change in entity is the correct answer.

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