Mastering Income Statements and Profit/Loss Accounts
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Questions and Answers

Which financial statement shows a company's revenues and expenses during a particular period?

  • Balance sheet
  • Statement of operations
  • Income statement (correct)
  • Cash flow statement

    • What is the purpose of an income statement?

  • To show a company's cash inflows and outflows
  • To show a company's assets and liabilities
  • To show a company's revenues and expenses (correct)
  • To show a company's net worth

    • Which term is used to describe the result after all revenues and expenses have been accounted for?

  • Earnings
  • Gross profit
  • Operating income
  • Net income (correct)

    • Which financial statement represents a single moment in time?

    <p>Balance sheet</p> Signup and view all the answers

    Do charitable organizations produce income statements?

    <p>No, they don't</p> Signup and view all the answers

    Which term is used to describe the financial statement that shows a company's revenues and expenses during a particular period?

    <p>Income statement</p> Signup and view all the answers

    What is the purpose of an income statement?

    <p>To show managers and investors whether the company made money or lost money during the period being reported</p> Signup and view all the answers

    Which financial statement represents a period of time?

    <p>Income statement</p> Signup and view all the answers

    What does the net income or net profit represent on an income statement?

    <p>The result after all revenues and expenses have been accounted for</p> Signup and view all the answers

    Which term is used to describe the financial statement that represents a single moment in time?

    <p>Balance sheet</p> Signup and view all the answers

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