The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called:
A) A Balance sheet (Statement of Financial Position).
B) A Statement of changes in equity.
C) A Statement of cash flows.
D) An Income statement (Statement of Comprehensive Income).
E) A Statement of financial position.

Question

Quizplus · Accepted Answer

An Income statement (also known as a Statement of Comprehensive Income) reports the revenues, expenses, and net profit or loss of a business over a specific period of time. It shows whether the business earned a profit or suffered a loss during that period. The other options listed - A) Balance sheet, B) Statement of changes in equity, C) Statement of cash flows, and E) Statement of financial position - all report different aspects of a company's financial position, but not the revenues and expenses that make up the income statement.

The Financial Statement That Reports Whether the Business Earned a Profit