Which of the following statements is true of an income statement?
A) There is net income when total expenses are greater than total revenues.
B) There is a net loss when total expenses are less than total revenue.
C) There is a net loss when total expenses are greater than total liabilities.
D) There is net income when total revenues are greater than total expenses.

Question

Quizplus · Accepted Answer

An income statement is a financial statement that reports a company's financial performance over a specific accounting period. It shows the revenues earned, expenses incurred, and the resulting net income or loss for that period. Net income is the excess of total revenues over total expenses, and this means that there is a net income when the total revenues are greater than the total expenses. Therefore, the true statement about an income statement is that there is net income when total revenues are greater than total expenses, as stated in option D.

Which of the Following Statements Is True of an Income