Which statement is true concerning an income statement?
A)The income statement shows how much profit the company has earned since it began operations.
B)Net income on the income statement should be equal to the amount of cash on the balance sheet.
C)The income statement summarizes the results of operations for a period of time.
D)The income statement indicates the liquidity of the company on an annual basis.

Question

Quizplus · Accepted Answer

The income statement summarizes the revenues, expenses, and net income or loss for a specific period of time, typically a month, quarter, or year. It does not show the company's profits since it began operations, nor does it provide information on the amount of cash on the balance sheet or the company's liquidity on an annual basis.

Which Statement Is True Concerning an Income Statement