A corporation's net income receives more attention than any other financial statement item.Why?
A)An upward trend in net income usually leads to dividends in the future.
B)An upward trend in net income usually leads to higher stock prices in the future.
C)An upward trend in net income usually leads to an unqualified audit opinion.
D)A and B

Question

Quizplus · Accepted Answer

Net income is a key indicator of a corporation's profitability and financial success. An upward trend in net income is seen as positive by investors and analysts, which can lead to increased stock prices and potential dividends in the future. Additionally, a high net income is usually a sign of good financial health, which can lead to an unqualified audit opinion from external auditors. Therefore, both options A and B are true, making D the best choice.

A Corporation's Net Income Receives More Attention Than Any Other