Answer (C) is correct . Nonrecurring gains and losses are sometimes added to or subtracted from income to arrive at income from continuing operations. Because ratios are used to predict the future, nonrecurring items not likely to recur should not be considered.
Answer (A) is incorrect because Income is less likely to be adjusted for recurring costs.
Answer (B) is incorrect because Income is less likely to be adjusted for recurring costs.
Answer (D) is incorrect because Income is less likely to be adjusted for recurring costs.
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