Which of the following correctly describes the various financial statements?
Posted: Sat Aug 07, 2021 6:41 am
A) An income statement covers a period of time.
B) The cash flow statement is a financial statement at a specific point in time.
C) The balance sheet is a financial statement that covers a period of time.
D) The statement of stockholders' equity is a financial statement at a specific point in time.
Answer: A
Explanation: The income statement reports the performance of a business during the accounting
period.
Difficulty: 1 Easy
Topic: Distinguish different financial statements
Learning Objective: 01-01 Recognize the information conveyed in each of the four basic
financial statements and the way that it is used by different decision makers (investors, creditors,
and managers).
B) The cash flow statement is a financial statement at a specific point in time.
C) The balance sheet is a financial statement that covers a period of time.
D) The statement of stockholders' equity is a financial statement at a specific point in time.
Answer: A
Explanation: The income statement reports the performance of a business during the accounting
period.
Difficulty: 1 Easy
Topic: Distinguish different financial statements
Learning Objective: 01-01 Recognize the information conveyed in each of the four basic
financial statements and the way that it is used by different decision makers (investors, creditors,
and managers).