Which of the following is the primary objective of an income statement?
A)Providing managers with detailed information about where the enterprise stands at a specific date.
B)Providing users outside the business organization with information about the company's financial position and operating results.
C)Reporting to the Internal Revenue Service the company's taxable income.
D)Indicating to investors in a particular company the current market values of their investments.

Question

Quizplus · Accepted Answer

The primary objective of an income statement is to provide users outside the business organization with information about the company's financial position and operating results. It shows how much revenue the company generated over a period of time and how much expenses were incurred to generate that revenue. This information is important for investors and creditors who use it to evaluate the company's profitability and ability to generate future cash flows.

Which of the Following Is the Primary Objective of an Income