Which of the following statements about the income statement and income statement accounts is correct?
A)The income statement reports the financial position of a company at a point in time.
B)Income statement accounts are permanent accounts,while balance sheet accounts are temporary accounts.
C)Income statement accounts are temporary accounts,while balance sheet accounts are permanent accounts.
D)The income statement reports the cash received and paid during the period.

Question

Quizplus · Accepted Answer

Balance sheet accounts are considered permanent,whereas income statement accounts are considered temporary.Another way people describe this difference is that the balance sheet takes stock of what exists at a point in time whereas the income statement depicts a flow of what happened over a period of time.The balance sheet (rather than the income statement)reports the financial position of a company at a point in time.The income statement (rather than the balance sheet)reports financial activities only for the current accounting period.The income statement reports revenues earned and expenses incurred (rather than the cash received and paid)during the period.

Which of the Following Statements About the Income Statement and Income