Question

QUESTION 6 of 10: The income statement is designed to measure:

a) A company's performance over a certain period of time
b) A company's performance on a specific day
c) Neither choices above are correct

Answer 1

a) A company's performance over a certain period of time

Step-by-step explanation:

An income statement reports the profit or loss that a business makes in a financial period. The statement compares the revenue a business generates in a period against the expenses for the period. If the revenues exceed the expenses, then the business made profits in that period.

A Business's financial period is usually one year or 12 months. An income statement reports profit for the 12 months. The income statement may be prepared to report performance for a shorter duration, such as three or six months.