Income can be distorted by factors other than inflation.The most important causes of distortion for inter-industry comparisons are:
A) accounting trends.
B) application of IFRS.
C) timing of revenue receipts and nonrecurring gains or losses.
D) cash reinvestment.

Question

Quizplus · Accepted Answer

The timing of revenue receipts and nonrecurring gains or losses can significantly impact income and distort inter-industry comparisons. Accounting trends and the application of IFRS may also affect income but are not the most important causes of distortion for inter-industry comparisons. Cash reinvestment is not relevant to income distortion.

Income Can Be Distorted by Factors Other Than Inflation