Which of the following statements best describes the income statement?

Question

Quizplus · Accepted Answer

The income statement is designed to show how much money the firm earned during a specific period of time, typically a year. It includes items such as revenue, expenses, and net income. Option A is incorrect because while the cash account may be important, it is not the focal point of the income statement. Option B is incorrect because EBITDA is just one measure of financial strength and may not be applicable to all industries. Option C is incorrect because net income and net cash flow can differ depending on the accounting principles used, even under IFRS.

Which of the Following Statements Best Describes the Income Statement