The Characteristic of Earnings That Makes It Most Useful for Decision

question 59

Multiple Choice

The characteristic of earnings that makes it most useful for decision making is called:

• A) extraordinary item.
• B) earnings quality.
• C) comprehensive income.
• D) clean opinion.

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Definitions:

Interest

The cost of borrowing money or the return on investment for savings and investments, often expressed as a percentage.

Adjusting Entry

An amendment added to the accounting records to accurately reflect the revenues earned and expenses incurred during a period.

Interest Note

A legal document that outlines the terms under which interest will be paid on borrowed funds.

Accrued Interest

Interest that has been incurred but not yet paid or received in cash.