Which accounting report is specifically designed to answer the question, 'What profit was earned in a particular period?'
A)Statement of comprehensive income.
B)Statement of financial position.
C)Statement of cash flows.
D)All of the above.

Question

Quizplus · Accepted Answer

The Statement of comprehensive income, also known as the income statement, summarizes the revenue earned and expenses incurred during a specific period, and ultimately calculates the profit or loss earned by the company. This statement is designed specifically to answer the question of what profit was earned during the period. The Statement of financial position and the Statement of cash flows provide information about the financial position and cash flow of the company respectively, but do not directly answer the question about profit earned. Therefore, option A) is the best choice.

Which Accounting Report Is Specifically Designed to Answer the Question