A potential investor,interested in predicting the earnings of a company in the future,should examine the:
A)Balance Sheet only.
B)Income Statement only.
C)Statement of Retained Earnings.
D)Statement of Retained Earnings and Balance Sheet.

Question

Quizplus · Accepted Answer

The Income Statement provides information on a company's revenues and expenses, resulting in its net income or loss. This information is crucial for predicting a company's future earnings. While the Balance Sheet and Statement of Retained Earnings also provide important financial information, they are not as directly related to future earnings as the Income Statement. Therefore, the Income Statement is the best choice for predicting a company's future earnings.

A Potential Investor,interested in Predicting the Earnings of a Company