Which of the basic financial statements is best used to answer the question, "How profitable is the business?"
A) Balance sheet
B) Statement of shareholder's equity
C) Income statement
D) Accounts receivable aging schedule

Question

Quizplus · Accepted Answer

The income statement is specifically designed to show the profitability of a business by summarizing its revenues and expenses over a given period of time. It will show the net income or loss for that period which answers the question of how profitable the business is.

Which of the Basic Financial Statements Is Best Used to Answer