The best measure of a firm's sustainable income is:
A) net income.
B) income from continuing operations.
C) income before extraordinary items.
D) income before extraordinary item and change in accounting principle.

Question

The best measure of a firm's sustainable income is: 
A) net income.
B) income from continuing operations.
C) income before extraordinary items.
D) income before extraordinary item and change in accounting principle.

Quizplus · Accepted Answer

Income from continuing operations is considered the best measure of a firm's sustainable income because it excludes the effects of discontinued operations, extraordinary items, and changes in accounting principles, providing a clearer picture of ongoing profitability.

The Best Measure of a Firm's Sustainable Income Is