Horace is reviewing a document that shows the results of his firm's operations over a period of one year.Horace is looking at the:
A)income statement
B)balance sheet
C)statement of cash flow
D)statement of financial position

Question

Quizplus · Accepted Answer

The income statement shows a company's revenue, expenses, and net income over a period of time, usually one year. It gives a summary of how the company performed financially during that time period. Since Horace is reviewing the results of his firm's operations over one year, the income statement is the most relevant document for him to review. The balance sheet shows a company's assets, liabilities, and equity at a specific point in time, so it does not provide a summary of the firm's performance over a period of time. The statement of cash flow shows the inflows and outflows of cash during a period, and the statement of financial position is another name for the balance sheet.

Horace Is Reviewing a Document That Shows the Results of His