The statement "This business produced net income of $520,000" is unclear because it failed to specify:
A)The accounting method,that is,accrual or cash basis.
B)Whether the amount earned is before or after expenses.
C)The time period.
D)The amount of cash withdrawn from the business by the owner.

Question

Quizplus · Accepted Answer

The statement failed to specify the time period in which the net income of $520,000 was produced. It could be for a year, a quarter, or a month, making it impossible to determine the business's financial performance accurately. A, B, and D are irrelevant to the clarity of the statement.

The Statement "This Business Produced Net Income of $520,000" Is