A major purpose of a pro-forma earnings statement is to exclude
A) salaries paid to non-productive employees.
B) kickbacks paid to the company by large customers
C) one-time charges not related to future earnings.
D) operating costs.

Question

Quizplus · Accepted Answer

The purpose of a pro-forma earnings statement is to show investors what earnings would look like if certain adjustments were made. These adjustments may include excluding one-time charges that are not related to future earnings (such as restructuring costs or legal settlements) in order to provide a clearer picture of the company's ongoing profitability. The other options (A, B, and D) are operating costs that should not be excluded from a pro-forma statement.

A Major Purpose of a Pro-Forma Earnings Statement Is to Exclude