Question

The quality of earnings concept indicates that
A. continuing operations and​ one-time transactions are of equal importance.
B. stockholders want the corporation to earn enough income to be able to pay its debts.
C. income from continuing operations is a more relevant predictor of future performance than income from​ one-time transactions.
D. net income is the best measure of the results of operations.

Answer 1

Answer:

C

Explanation:

When there's a continuous income flow from the continuous transactions than income from one time transactions, it shows the effectiveness in the quality of earnings because it ensures a profitable future.

Hence we say that income from continuing operations is a more relevant predictor of future performance than income from​ one-time transactions.

therefore option C is correct.