Overall analysis of income statement accounts may bring to light errors, omissions, and inconsistencies not disclosed in the overall analysis of balance sheet accounts. The income statement analysis can best be accomplished by comparing monthly

Question

Quizplus · Accepted Answer

The best choice for analyzing the income statement is to compare the revenue and expense account totals to the corresponding figures of the preceding years. This will help identify any errors, omissions, or inconsistencies in the income statement. Option A refers to comparing income statement ratios to balance sheet ratios, which may not provide a comprehensive understanding of the income statement. Option B refers to comparing revenue and expense account balances to the monthly reported net income, which may not provide a comparative analysis. Option C refers to comparing income statement ratios to published industry averages which may not be relevant to the company's specific industry or size.

Overall Analysis of Income Statement Accounts May Bring to Light