Which of the following statements about an income statement is true?
A) An income statement provides information on an organisation's profitability at a certain point in time.
B) An income statement deducts liabilities from assets to determine shareholders' equity.
C) The expenses relate to cash payments.
D) For revenue to be included,it is not necessary for cash to have been received.

Question

Quizplus · Accepted Answer

An income statement includes revenue even if cash has not yet been received. This is because revenue is recognized when it is earned, not necessarily when payment is received.

Which of the Following Statements About an Income Statement Is