Which of the following statements about the income statement and income statement accounts is correct?
A) The income statement reports the financial position of a company at a point in time.
B) The balance sheet reports financial activities only for the current accounting period.
C) Income statement accounts are temporary accounts, while balance sheet accounts are permanent accounts.
D) The income statement reports the cash received and paid during the period.

Question

Quizplus · Accepted Answer

Income statement accounts, such as revenue and expenses, are temporary accounts as their balances are reset to zero at the end of each accounting period. Balance sheet accounts, such as assets, liabilities, and equity, are permanent accounts as their balances carry forward from one accounting period to the next. Options A, B, and D are incorrect because they do not accurately describe the income statement or income statement accounts.

Which of the Following Statements About the Income Statement and Income