Why is the Income Statement important?
A)Investors may use it to determine if the business is earning a satisfactory return on assets employed
B)Suppliers and creditors may use it to assess whether the business is generating enough income in order to pay its suppliers and other creditors
C)Net income or net loss may be used as a measure to assess the business's success or failure
D)All of the above

Question

Quizplus · Accepted Answer

The income statement is important because it provides key financial information about a business's profitability and financial performance. Investors may use it to determine if the business is earning a satisfactory return on assets employed, while suppliers and creditors may use it to assess whether the business is generating enough income to pay its bills. Additionally, net income or net loss may be used as a measure to assess the business's success or failure. As such, all of the options (A, B, and C) are correct.

Why Is the Income Statement Important