The ﬁnancial statement summarizing a ﬁrm's accounting performance over a period of time is the:
A)income statement.
B)statement of ﬁnancial position.
C)statement of cash ﬂows.
D)tax reconciliation statement.
E)shareholders' equity sheet.

Question

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The income statement summarizes a firm's accounting performance over a period of time by showing the revenues, expenses, and net income or net loss for that period. The statement of financial position (also known as the balance sheet) shows the firm's assets, liabilities, and shareholders' equity at a specific point in time, while the statement of cash flows shows the inflows and outflows of cash during a period of time. The tax reconciliation statement and shareholders' equity sheet are not commonly used financial statements.

The ﬁNancial Statement Summarizing a ﬁRm's Accounting Performance Over a Period