A question asked by stockholders is,"How much profit did the company make?" What should the stockholder examine to get the most information that will help evaluate the answer to this question?
A)The balance sheet,because retained earnings represents current profits
B)The statement of cash flows,as cash inflows and outflows represents current profits
C)The income statement,since it shows the revenues and expenses for the period
D)The economic resources of the company

Question

Quizplus · Accepted Answer

The income statement is the best choice as it provides information about the company's revenues and expenses during a specific period, which ultimately determines the profit or loss for that period. The balance sheet and statement of cash flows offer information about the company's financial position or liquidity, but they do not directly address the question of the company's profitability. Economic resources are not a financial statement, and therefore not relevant to this question.

A Question Asked by Stockholders Is,"How Much Profit Did the Company