Before buying a business, a thorough analysis of the ____________ will show whether the business earned an income in the last year.
A) Income statement
B) Balance sheet
C) Cash flow statement
D) Statement of retained earnings

Question

Quizplus · Accepted Answer

The income statement shows the revenue, expenses, and net income or loss for a business. It is the best choice for determining whether a business earned an income in the last year. The balance sheet shows the assets, liabilities, and equity of a business at a specific point in time, while the cash flow statement shows the cash inflows and outflows of a business over a specific period of time. The statement of retained earnings shows the changes in a business's retained earnings over a specific period of time.

Before Buying a Business, a Thorough Analysis of the ____________