Which statement primarily reports a business's revenues and expenses for an accounting period?
Correct answer: C. Income statement
- A. Statement of changes in equity
- B. Statement of financial position
- C. Income statement
- D. Statement of cash flows
Explanation
The income statement measures financial performance by reporting revenues, expenses and resulting profit or loss for a period. The statement of financial position reports balances at a specific date, while the other statements serve different purposes.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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128 free Financial Statements MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
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