The income statement and statement of cash flows provide information about the _____, respectively, of a firm during a period.
A)asset and equity position at a moment in time and profitability
B)asset and equity position at a moment in time and liquidity
C)liquidity and profitability
D)profitability and liquidity
E)none of the above

Question

Quizplus · Accepted Answer

The income statement provides information about the profitability of a firm during a period, while the statement of cash flows provides information about the liquidity of the firm during a period. Therefore, option D is the most appropriate choice. Option A is incorrect because it refers to the balance sheet, which provides information about a firm's asset and equity position at a moment in time. Option B is also incorrect because it refers to the balance sheet and doesn't include information about profitability or liquidity. Option C is partially correct because it includes information about liquidity, but not about profitability. Option E is incorrect because there are correct choices available.

The Income Statement and Statement of Cash Flows Provide Information