A financial statement user would determine if a company was profitable or not during a specific period of time by reviewing
A) the income statement
B) the balance sheet
C) the statement of cash flows
D) cannot be determined with any of these

Question

Quizplus · Accepted Answer

The income statement shows the revenues and expenses for a specific period, and the difference between them is the net income or loss, which indicates if the company was profitable or not. The balance sheet shows the company's assets, liabilities, and equity at a certain point in time, and the statement of cash flows shows the company's cash inflows and outflows, but neither of them provides information about profitability.

A Financial Statement User Would Determine If a Company Was