What is a limitation of the income statement?
A) It has no predictive value.
B) It requires extensive judgement and estimation in order to draw conclusions.
C) It does not allow users to judge risk.
D) It only reports financial standing as of a point in time.

Question

Quizplus · Accepted Answer

The income statement requires extensive judgment and estimation, such as in recognizing revenue and expenses, which can affect the conclusions drawn from it.

What Is a Limitation of the Income Statement