Question

The best measure of a firm's sustainable income is: Select one: a. income before extraordinary items b. income from continuing operations c. net income d. income before extraordinary item and change in accounting principle

Answer 1

Answer: b. income from continuing operations

Step-by-step explanation:

The Sustainable income of a firm refers to the income that it derives from its operations in order to be able to fund the company. The best measure of such would therefore be income from continuing operations.

Income from Continuing Operations are so named because they come from the operations that the firm still operates and have not shutdown or sold off. The income that these operations make is what will keep the company sustained in future as they are still in operation.