alleryAn analyst prefers profit that comes from sustainable trading rather than one-off sales. She is judging earnings:
AQuarter
BQuality
CQuantity
DQuotient
Answer & Solution
Correct answer: B. Quality
1. Two firms can report the same profit from very different sources.
2. Profit that repeats next year is worth more than a one-off.
3. She is judging the quality of earnings.
_Source: OpenStax Principles of Financial Accounting, Chapter 2, Introduction to Financial Statements._
Keep practising Financial Statements of a Company
Browse all Financial Statements of a Company questions for AP Intermediate 2nd Year, or explore more Accountancy topics.
Related questions
Managers at Waste Management deferred expenses to hit earnings targets and were charged inA firm reports a current ratio of 0.8. This tells a lender the firm should watch its shortDividing current assets of 6,200 by current liabilities of 1,850 gives a current ratio of Current assets of 6,200 less current liabilities of 1,850 gives working capital of:The ability of a business to turn assets into cash to meet short-term needs is its:A shop has assets of 18,700 and liabilities of 1,850. Its owner's equity is:The balance sheet is the accounting equation in statement form: assets equal liabilities pA supplier's bill falling due in ninety days appears on the balance sheet as a: