Which statement best describes the income statement of a manufacturer?
A) It covers a certain period of time.
B) It contains only manufacturing costs.
C) It will show the ending balance of work-in-process.
D) It will show the ending balance of materials inventory.

Question

Quizplus · Accepted Answer

The income statement of a manufacturer, like any other business, covers a certain period of time (e.g. a month, a quarter, a year). Option B is incorrect because the income statement of a manufacturer will include all types of costs, not just manufacturing costs. Options C and D are also incorrect because the income statement shows expenses, revenues, and net income, not the ending balances of inventory accounts.

Which Statement Best Describes the Income Statement of a Manufacturer