Which of the following is the best definition of sustainable income?
A) Sustainable income is a measure of solvency that does not include capital expenditure.
B) Sustainable income is the same as net income.
C) Sustainable income is income that is unusual in nature and infrequent in occurrence.
D) Sustainable income is the most likely level of income to be obtained in the future.

Question

Quizplus · Accepted Answer

Sustainable income is the most likely level of income to be obtained in the future, taking into account recurring sources of revenue and expenses. It is an estimate of how much income a company can generate on an ongoing basis without relying on one-time or unusual events. Option A is a definition of the term solvency, and Option B is incorrect because net income does not necessarily reflect a sustainable level of income. Option C refers to non-recurring income items.

Which of the Following Is the Best Definition of Sustainable