Financial statement users typically begin their assessment of permanent earnings with:
A) sales revenue.
B) income from continuing operations.
C) net income.
D) gross profit.

Question

Quizplus · Accepted Answer

Users typically begin their assessment of permanent earnings with income from continuing operations, as this figure excludes any one-time or non-recurring items and provides a better indication of the company's long-term profitability. Sales revenue, net income, and gross profit do not necessarily reflect the true earnings potential of a company, as they may include non-operating or non-recurring items that skew the figures.

Financial Statement Users Typically Begin Their Assessment of Permanent Earnings