Net income is based on estimates.

Name: Net income is based on estimates.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Proper counting is critical to income measurement,but estimation also plays a role.For example,equipment will not last forever.Instead,it will be "used up" over time to generate the company's revenue.It should therefore be expensed over the period in which it is used.Doing so requires an estimate of the period over which each category of equipment will be used.

Net Income Is Based on Estimates