Practice Question

1. After reviewing her company's income statement, Gail feels upset because she thinks the income statement should reflect that her reputation in the marketplace adds value to the company. What comment is most appropriate for Gail?

Although the report implicitly reflects your reputation, the numbers do not explicitly show it because reputation is subjective.
Your reputation is not that great, and it is better not to show it on the income statement.
Your reputation is worth $10,000, and the accountant will reflect that number on the income statement.