6/16/23, 5:51 PM Interpreting Non-GAAP Reports Exam | Wall Street Prep
INTERPRETING NON-GAAP REPORTS EXAM FROM WALL STREET
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PREP 2025 LATEST |
WALL STREET PREP INTERPRETING NON-GAAP REPORTS EXAM
QUESTIONS AND ANSWERS GRADED A+
Question 1 of 18
Which of the below statements is MOST ACCURATE?
The primary purpose of non-GAAP disclosures is to:
Provide investors a set of financial statements and disclosures ahead of GAAP reports included
within 10Q and 10Ks.
Modify GAAP to provide a more comprehensive detail of income and expense categories.
Modify GAAP to better align the reporting of performance with how investors want to see the data.
Modify GAAP to make it easier for investors to reconcile GAAP measures of profit to cash flow
measures of profit.
Question 2 of 18
All else being equal, a non-GAAP disclosure that identifies stock-based compensation expense will show
Higher non-GAAP operating income than GAAP operating income
Lower non-GAAP operating income than GAAP operating income
No difference between GAAP and non-GAAP operating income
No difference between GAAP and non-GAAP net income
Question 3 of 18
A company reporting under US GAAP seeking to present a more favorable view of operating income in its
quarterly earnings release could:
Identify a gain on sale in a non-GAAP reconciliation.
Identify a restructuring charge (expense) in a non-GAAP reconciliation.
https://www.wallstreetprep.com/wsp_exam/interpreting-non-gaap-reports-exam-v1/?assigned=true 1/12
, 6/16/23, 5:51 PM Interpreting Non-GAAP Reports Exam | Wall Street Prep
Identify a loss in the fair value of an equity investment.
Elect to not recognize stock-based compensation on its GAAP income statement.
All of the above.
Question 4 of 18
Which of the following non-GAAP disclosures is LEAST LIKELY to create variance between GAAP and non-
GAAP operating income:
Goodwill impairment
Inventory write down
Currency loss from closing of a foreign subsidiary
Gain on sale of an asset
Question 5 of 18
Which one of these items will MOST LIKELY be reported after-tax below net income?
Restructuring expenses
Asset impairment charge
Gains/losses from discontinued operations
Gains/losses on sale of assets
Question 6 of 18
Tremont Industries reported the following non-GAAP financials:
(Values in $000s) 2020
https://www.wallstreetprep.com/wsp_exam/interpreting-non-gaap-reports-exam-v1/?assigned=true 2/12
INTERPRETING NON-GAAP REPORTS EXAM FROM WALL STREET
Exit to Learning Dashboard
PREP 2025 LATEST |
WALL STREET PREP INTERPRETING NON-GAAP REPORTS EXAM
QUESTIONS AND ANSWERS GRADED A+
Question 1 of 18
Which of the below statements is MOST ACCURATE?
The primary purpose of non-GAAP disclosures is to:
Provide investors a set of financial statements and disclosures ahead of GAAP reports included
within 10Q and 10Ks.
Modify GAAP to provide a more comprehensive detail of income and expense categories.
Modify GAAP to better align the reporting of performance with how investors want to see the data.
Modify GAAP to make it easier for investors to reconcile GAAP measures of profit to cash flow
measures of profit.
Question 2 of 18
All else being equal, a non-GAAP disclosure that identifies stock-based compensation expense will show
Higher non-GAAP operating income than GAAP operating income
Lower non-GAAP operating income than GAAP operating income
No difference between GAAP and non-GAAP operating income
No difference between GAAP and non-GAAP net income
Question 3 of 18
A company reporting under US GAAP seeking to present a more favorable view of operating income in its
quarterly earnings release could:
Identify a gain on sale in a non-GAAP reconciliation.
Identify a restructuring charge (expense) in a non-GAAP reconciliation.
https://www.wallstreetprep.com/wsp_exam/interpreting-non-gaap-reports-exam-v1/?assigned=true 1/12
, 6/16/23, 5:51 PM Interpreting Non-GAAP Reports Exam | Wall Street Prep
Identify a loss in the fair value of an equity investment.
Elect to not recognize stock-based compensation on its GAAP income statement.
All of the above.
Question 4 of 18
Which of the following non-GAAP disclosures is LEAST LIKELY to create variance between GAAP and non-
GAAP operating income:
Goodwill impairment
Inventory write down
Currency loss from closing of a foreign subsidiary
Gain on sale of an asset
Question 5 of 18
Which one of these items will MOST LIKELY be reported after-tax below net income?
Restructuring expenses
Asset impairment charge
Gains/losses from discontinued operations
Gains/losses on sale of assets
Question 6 of 18
Tremont Industries reported the following non-GAAP financials:
(Values in $000s) 2020
https://www.wallstreetprep.com/wsp_exam/interpreting-non-gaap-reports-exam-v1/?assigned=true 2/12
