Income Statement Basis for Trading Businesses Steps:

• Identify the question: Determine the accounting basis for a trading business's income statement.
• Recall standard practice: Trading businesses use accrual accounting to match revenues and expenses.
• Evaluate choices: Options combine unspecified items 1, 2, 3; D selects 2 only.
• Conclude: Without definitions of 1, 2, 3, resolution is impossible.

Not enough information.

Final answer: Not enough information.