Question

The statement of activities (income statement) presents, in aggregated fashion, ________?

1) the financial position of a company
2) the cash flows of a company
3) the revenues and expenses of a company
4) the assets and liabilities of a company

Answer 1

The statement of activities, also known as the income statement, aggregates a company's revenues and expenses to show its financial performance, including profits or losses.

Step-by-step explanation:

The statement of activities, commonly known as the income statement, presents in an aggregated fashion the revenues and expenses of a company. This financial statement reflects the company’s performance over a specific period, demonstrating how revenues are transformed into net income or net loss by deducting expenses. Investment income can impact the revenues while expenses, payments to customers, and the results of operations, such as profits or losses, show the outflow of money and are integral to understanding a company’s financial performance.