Question

Which of the following statement shows the details of the company's profit and loss related activities for a period of time?

• A. Balance sheet
• B. Income statement
• C. Statement of changes in financial position
• D. Auditors report

Answer 1

Answer: (B)

Income statement

An income statement is one of the three important financial statements used for reporting a company's financial performance over a specific accounting period, with the other two key statements being the balance sheet and the statement of cash flows. Also known as the profit and loss statement or the statement of revenue and expense, the income statement primarily focuses on company’s revenues and expenses during a particular period. The profit or loss is determined by taking all revenues and subtracting all expenses from both operating and non-operating activities.