An analysis of the nature of nonoperating items is important in judging the quality of the net income figure.

Question

Quizplus · Accepted Answer

Nonoperating items are items that are not related to the core operations of the business, such as gains/losses from the sale of assets, interest income or expenses, and one-time charges or gains. These items can distort the overall net income figure, making it important to analyze and understand their nature in order to accurately judge the quality of the net income figure. Therefore, the statement is true.

An Analysis of the Nature of Nonoperating Items Is Important