Describe the importance of separating income from continuing operations from other, nonrecurring items.

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Income from continuing operations are the income earned or genarated for the regular or normal course of the business. This is the actual income from the operations of the business organisation. Nonrecurring incomes are incomes which are not intended to be earned or generated from the normal or regular course of business. At the end of each financial year the performation of a business organisation is evaluated and the result may be a profit or loss, also the financial position of the busieness is cosidered at for making a clear idea about the growth or strength of the business.

Income is a key factor depending on which various stakeholders of an organisation makes their decisions and strategies. Income from continuing operations are the real earnings and are likely to be continued in the future also but on the other hand nonrecurring incomes are uncertain it may not occure again in the future. So, while taking investment decisions or any importent decisions one must consider only the income from continuing operations not the rather that the total income including the nonrecurring income which is totally uncertain in future, otherwise it may reasult into a misleading decision. So for these reasons for business analysis and critical decision making incomes must be seperated into income from continuing operations and income from nonrecussing sources.

Thank You...!!

ekkarill92 answered 1 year ago

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