The characteristic of an earnings number that makes it most useful for decision making is called:

Question

Quizplus · Accepted Answer

Earnings quality refers to the degree to which reported earnings accurately reflect a company's true operating performance. High-quality earnings are considered more useful for decision making because they provide a reliable basis for assessing a company's past and future financial performance. Factors that can affect earnings quality include the consistency and sustainability of a company's earnings, the transparency of its accounting practices, and the absence of unusual or one-time items that could distort the accuracy of reported earnings.

The Characteristic of an Earnings Number That Makes It Most