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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Which of the following statements regarding the income statement is true?

  1. The income statement provides information about the profitability and growth of a company.
  2. The income statement shows the results of a company’s operations at a specific point in time.
  3. The income statement consists of assets, expenses, liabilities, and revenues.
  4. Typical income statement accounts include sales revenue, unearned revenue, and cost of goods sold.

To determine

Concept Introduction:

Financial statements: Financial statements are prepared to summaries the account at the end of the period. The statements prepared are Income statement, Balance sheet, Statement of owner’s equity and Cash flows statements.

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

To choose:

The true statement regarding the income statement.

Explanation

Explanation for correct answer: Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period. Hence option a is the right answer.

Explanation for incorrect answers:

b...

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