The income statement is an important financial statement for all of the following reasons, except
A) the income statement helps shareholders evaluate management's operating effectiveness.
B) past income statements can be useful indicators in predicting current and future cash dividend payments as well as future stock prices.
C) the income statement provides useful information concerning the corporation's ability to generate sufficient cash flows from operations for use in payment of its operating obligations.
D) the income statement reports the amount of net cash inflows resulting from operating, financing, and investing activities to users.

Question

Quizplus · Accepted Answer

The income statement does not report net cash inflows from operating, financing, and investing activities. Instead, it shows the company's revenues, expenses, and net income or loss over a period. The statement of cash flows, not the income statement, reports cash inflows and outflows from operating, financing, and investing activities.

The Income Statement Is an Important Financial Statement for All