The Financial Statement That Reports Whether the Business Earned a Profit

question 8

Multiple Choice

The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called the:

• A)Balance sheet.
• B)Statement of owner's equity.
• C)Statement of cash flows.
• D)Income statement.
• E)Statement of financial position.

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Definitions:

Capacity Costs

Expenses related to the maximum level of production or service capacity that a business can achieve, including costs for maintaining and operating production facilities.

Variable Overhead Spending Variance

The difference between the actual variable overhead costs incurred and the expected costs allotted for the actual level of activity.

Unfavourable

Describes an outcome or condition that is not beneficial or desired, often used in financial contexts to indicate underperformance.

Favourable

A term usually used in finance and accounting to refer to variances or differences that are beneficial to a company's financial health.