The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called the:
A)Balance sheet.
B)Statement of owner's equity.
C)Statement of cash flows.
D)Income statement.
E)Statement of financial position.

Question

Quizplus · Accepted Answer

The income statement reports the profits earned by the business and lists the revenues and expenses. The balance sheet reports the assets, liabilities and equity of the business at a specific point in time. The statement of owner's equity reports the changes in owner's equity over a period of time. The statement of cash flows reports the inflows and outflows of cash in the business over a period of time. The statement of financial position is not a commonly used term in accounting, although it might refer to the balance sheet in some contexts.

The Financial Statement That Reports Whether the Business Earned a Profit