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 owner's equity

Answer: (C)

The main idea is that this financial report measures profitability over a period by summarizing revenues and expenses to arrive at net income or loss. This is why it’s commonly called the profit and loss statement; “profit” reflects net income and “loss” reflects a deficit after expenses are subtracted from revenues. The income statement shows performance across a span of time, unlike the balance sheet, which is a snapshot of assets, liabilities, and owner’s equity at a single point in time. It also differs from the cash flow statement, which tracks actual cash inflows and outflows, and from the statement of owner's equity, which shows how ownership interests change over the period.

The main idea is that this financial report measures profitability over a period by summarizing revenues and expenses to arrive at net income or loss. This is why it’s commonly called the profit and loss statement; “profit” reflects net income and “loss” reflects a deficit after expenses are subtracted from revenues. The income statement shows performance across a span of time, unlike the balance sheet, which is a snapshot of assets, liabilities, and owner’s equity at a single point in time. It also differs from the cash flow statement, which tracks actual cash inflows and outflows, and from the statement of owner's equity, which shows how ownership interests change over the period.