A financial statement user would determine if a company was profitable or not during a specific period of time by reviewing the
A) income statement
B) balance sheet
C) statement of cash flows
D) statement of stockholders' equity

Question

Quizplus · Accepted Answer

The income statement shows a company's revenues, expenses, and net income (or loss) for a specific period of time, which is the primary indicator of its profitability during that time period. The balance sheet provides information about a company's assets, liabilities, and equity at a specific point in time, but does not directly reflect profitability. The statement of cash flows shows the sources and uses of a company's cash during a specific period of time, but does not necessarily indicate profitability. The statement of stockholders' equity shows the changes in a company's equity during a specific period of time, but also does not directly reflect profitability.

A Financial Statement User Would Determine If a Company Was