An income statement is also called

An income statement is also called

• A. Balance sheet
• B. Cash flow statement
• C. Profit and loss statement
• D. Statement of changes in equity

Answer: (C)

The income statement focuses on how well a business performed over a period by listing revenues and expenses to show the net result of those activities. Because it reveals profit or loss, it is commonly called the profit and loss statement. Other statements serve different purposes: the balance sheet shows what the business owns and owes at a single point in time, the cash flow statement tracks actual cash movements, and the statement of changes in equity shows how owner’s equity has changed. In farm business terms, the income statement helps you see profitability over the reporting period.

The income statement focuses on how well a business performed over a period by listing revenues and expenses to show the net result of those activities. Because it reveals profit or loss, it is commonly called the profit and loss statement. Other statements serve different purposes: the balance sheet shows what the business owns and owes at a single point in time, the cash flow statement tracks actual cash movements, and the statement of changes in equity shows how owner’s equity has changed. In farm business terms, the income statement helps you see profitability over the reporting period.