Which of the following statements is true?
A)Expenses are listed before revenues on the income statement.
B)Operating income is listed before net income on the income statement.
C)The income statement demonstrates the effect of net income on the balance sheet.
D)Net income is listed before net operating income on the income statement.

Question

Quizplus · Accepted Answer

Operating income (also known as income from operations) is listed before net income on the income statement. This is because operating income represents the earnings generated from a company's core business operations, while net income represents the total profit or loss after all expenses and revenues have been accounted for. Additionally, it's worth noting that expenses are typically listed before revenues on the income statement, so choice A is incorrect. Choice C is also incorrect because the income statement shows the effect of revenues and expenses on net income, not the other way around. Finally, choice D is incorrect because net operating income is not typically listed on the income statement; instead, operating income is the relevant figure.

Which of the Following Statements Is True