Which one of the following statements regarding financial reports is correct?
A)The balance sheet classifies all assets according to operating,investing,and financing activities.
B)The income statement is used to show that a company's resources equal claims to those resources.
C)The statement of stockholders' equity updates the balances of common stock and retained earnings for related transactions during the year.
D)The statement of cash flows shows cash inflows and outflows from operating activities only.

Question

Quizplus · Accepted Answer

The statement of stockholders' equity updates the balances of common stock and retained earnings for related transactions during the year. The balance sheet classifies assets according to current or long-term nature, and the income statement shows revenue, expenses and net income/loss, not resource claims. The statement of cash flows covers operating, investing and financing activities.

Which One of the Following Statements Regarding Financial Reports Is