By focusing only on the income statement,we do not obtain a full picture of all the gains and losses that may have occurred for an entity during the perioD.

Question

Quizplus · Accepted Answer

The income statement only presents the financial performance of an entity for a certain period, and it does not reflect all the financial activities that may have impacted the entity. For example, changes in the balance sheet and cash flow statement are not captured in the income statement. Therefore, to obtain a complete understanding of the financial position of an entity, it is essential to analyze all the financial statements.

By Focusing Only on the Income Statement,we Do Not Obtain