- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 2. Analyzing Income Statements
- Subject 4. Non-Recurring Items
CFA Practice Question
Non-operating items include all of the following except ______.
II. uninsured losses from a fire
III. changing from one accounting method to another
I. a gain from the sale of a segment of a company
II. uninsured losses from a fire
III. changing from one accounting method to another
Correct Answer: None of these statements is true.
Non-operating items are items that are not related to the normal operations of a company. These include discontinued operations (a gain from the sale of a segment of a company) as well as unusual or infrequent items items (uninsured losses from a fire), and changes in accounting methods.
User Contributed Comments 9
| User | Comment |
|---|---|
| RCapistrano | What is not a nonoperating item? Not + non- (double negatives)= positive (i.e., what is an operating item?) -- leads to choice "None of these". |
| cleopatraliao | I thought those things r non-recurring items but not non-occuring items... |
| ColonelCFA | The double negative in the question is tricky |
| johntan1979 | DEA |
| gill15 | So non-operating items are Investing and Financing activities which includes IDEA? |
| johntan1979 | DEA |
| Shaan23 | Sale of a segment - A - Thats not discontinuted operations Sale of a segment is Unusual or Infrequent. Answer should be except i) Gains and losses arising when a company sells and asset OR part of a business ---> Unusual or infrequent. What am I missing? |
| Kevdharr | Think I-D-E-A. I is considered an operating item and its gain or loss is included in PRE-TAX income (above the line: D-E-A- are considered non-operating items so the gain or loss that they result in are included AFTER TAX (below the line) Revenue Cost of good sold Blah blah blah I- unusual of infrequent events Pre-tax income D- Discontinued operations E- Extraordinary events A- Accounting changes: Interest Taxes After tax income I think that's right at least ha |
| choas69 | Revenues COGS Gross Profit Operating Expenses Operating Profit Unusual OR Infrequent items EBIT Financing Costs Pre Tax Income Income Taxes Net Income from continuing operations Discontinued operations Extra Ordinary items Changes in accounting principles Net Income |