Which term is another name for a profit and loss statement?

Which term is another name for a profit and loss statement?

• A. Income Statement
• B. Balance Sheet
• C. Cash Flow Statement
• D. Statement of Changes in Equity

Answer: (A)

A profit and loss statement summarizes revenues and expenses over a period to determine net income or loss, so its most common name is the income statement because it reports the income the business earns as well as the costs it incurs to generate that income. The balance sheet shows assets, liabilities, and equity at a point in time; the cash flow statement tracks actual cash movements; the statement of changes in equity shows how owners’ equity changes over the period.

A profit and loss statement summarizes revenues and expenses over a period to determine net income or loss, so its most common name is the income statement because it reports the income the business earns as well as the costs it incurs to generate that income. The balance sheet shows assets, liabilities, and equity at a point in time; the cash flow statement tracks actual cash movements; the statement of changes in equity shows how owners’ equity changes over the period.