"Financial Report":Financial Reporting

A is correct. High financial reporting quality provides useful information to decision makers. Since foreign exchange gains and losses may not recur, they should be disclosed separately and not included in cost of goods sold. 

B is incorrect. Long-term leases for customized pieces of equipment should be reported as finance leases and conforms to IFRS, therefore this is not low quality reporting.

 C is incorrect. If properly disclosed, an increase in EPS from the sale of a subsidiary does not represent low quality financial reporting, but it may be low quality earnings.

C is correct. A company can intentionally sell older, lower-cost layers of inventory to generate earnings without supporting cash flow in order to produce specific earnings benefits. 

A is incorrect because a company simply may have obsolete inventory on hand that should be marked down to its net realizable value; such markdowns alone do not represent attempts to manipulate inventory in order to improve reported financial results. 

B is incorrect because declining inventory turnover may be a result of obsolescence problems that should be recognized, not because of deliberate attempts to manipulate inventory in order to improve reported financial results.