Assuming proper accounting disclosure is used, a large extraordinary loss has what effect on the normal operating profits in the future?
A) It raises it.
B) It lowers it.
C) It has no effect.
D) More information is needed to determine the effect.

Question

Quizplus · Accepted Answer

Assuming proper accounting disclosure is used, a large extraordinary loss is recognized as a one-time event and is not expected to occur again in the future. Therefore, it has no impact on the normal operating profits in the future.

Assuming Proper Accounting Disclosure Is Used, a Large Extraordinary Loss