Which one of the following statements regarding financial reports is correct?
A)The balance sheet classifies all assets according to operating,investing,and financing activities.
B)The income statement is used to show that a company's resources equal claims to those resources.
C)The statement of stockholders' equity updates the balances of common stock and retained earnings for related transactions during the year.

Question

Quizplus · Accepted Answer

The statement of stockholders' equity updates the balances of common stock and retained earnings for related transactions during the year. The balance sheet classifies assets by liquidity, not operating, investing, and financing activities. The income statement shows a company's revenues and expenses, not resources and claims to those resources.

Which One of the Following Statements Regarding Financial Reports Is