- 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
Which of the following items would not be included in net income or loss for a period?
B. Prior period adjustments
C. Discontinued operations
A. Cumulative effect of accounting changes
B. Prior period adjustments
C. Discontinued operations
Correct Answer: B
The cumulative effects of accounting changes are reported on the income statement. Prior period adjustments are related to earlier accounting periods and are not reported on the current year's income statement.
User Contributed Comments 3
| User | Comment |
|---|---|
| oneashok | can anyone please explain about prior period adjustments? |
| oneashok | Got it! Prior period adjustments are usualy accounted in a later period... right? |
| johntan1979 | Nope. They are already accounted for and not adjusted for again in the current year's statement. |