The income statement
A)measures a firm's performance as of a specific date.
B)determines the aftertax income of a firm.
C)excludes deferred taxes.
D)includes dividends as an expense.
E)determines the value of a firm to its stockholders.

Question

Quizplus · Accepted Answer

The income statement determines the aftertax income of a firm, which is also known as net income. This is calculated by subtracting all expenses (including taxes) from total revenue. It does not measure a firm's performance as of a specific date or determine the value of a firm to its stockholders. Deferred taxes may or may not be included depending on accounting standards, and dividends are not considered an expense on the income statement.

The Income Statement