Question

Which of the following describes the information reported in the income statement?

A) All accounts and account balances are shown. B) Total assets equal total liabilities plus stockholders' equity.
C) Net income for the period is calculated by subtracting expenses from revenues.
D) Changes in stockholders' equity are shown through changes in common stock and retained earnings.

Answer 1

The information reported in the income statement is described by option C) Net income for the period is calculated by subtracting expenses from revenues.

Step-by-step explanation:

The information reported in the income statement is described by option C) Net income for the period is calculated by subtracting expenses from revenues.

The income statement, also known as the profit and loss statement, shows a company's revenue, expenses, and net income for a specific period of time. It is used to assess a company's profitability and its ability to generate income. The net income is calculated by subtracting the total expenses from the total revenues.

For example, if a company has $10,000 in revenue and $6,000 in expenses, the net income would be $4,000 ($10,000 - $6,000).