Which financial statement is primarily used to determine a company's profit or loss over an accounting period?
Correct answer: C. Income statement
- A. Statement of financial position
- B. Cash flow statement
- C. Income statement
- D. Statement of changes in equity
Explanation
The income statement reports revenue, expenses and profit or loss for a specified period. The statement of financial position reports balances at a particular date, while the cash flow statement focuses on cash movements.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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