Which statement is true concerning an income statement?
A)The income statement shows how much profit the company has earned since it began operations.
B)Net income on the income statement should be equal to the amount of cash on the balance sheet.
C)The income statement summarizes the results of operations for a point in time.
D)None of these are correct.

Question

Quizplus · Accepted Answer

The income statement does not show profit since the company began operations; that's the role of retained earnings on the balance sheet. Net income on the income statement does not equal the amount of cash on the balance sheet, as the income statement includes non-cash revenues and expenses. The income statement summarizes operations over a period of time, not a point in time.

Which Statement Is True Concerning an Income Statement