Question

Which accounts are found on an income statement?

1) Revenue and expenses
2) Assets and liabilities
3) Equity and dividends
4) Cash and investments

Answer 1

An income statement includes revenue and expenses to determine the net income of a business.

Step-by-step explanation:

An income statement is a financial statement that shows the revenue, expenses, and net income of a business over a specific period of time. The accounts found on an income statement are revenue and expenses. Revenue represents the income generated by the business through its operations, while expenses are the costs incurred to generate that revenue.

For example, if a company sells $100,000 worth of products, the revenue account would show $100,000, and if the company incurs $80,000 in expenses to produce and sell those products, the expenses account would show $80,000. The difference between revenue and expenses is the net income, which represents the profit or loss the company has made.