Which of the Following Financial Statements Is Also Called a Profit

question 86

Multiple Choice

Which of the following financial statements is also called a profit and loss statement?

• A)Statement of changes in retained earnings
• B)Income statement
• C)Statement of cash flows
• D)Balance sheet

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Definitions:

Periodic inventory system

An inventory accounting system where updates to inventory levels are made periodically, usually at the end of an accounting period, rather than after each transaction.

Ending inventory

The total value of goods available for sale at the end of an accounting period, calculated by adding purchases to beginning inventory and subtracting cost of goods sold.

Perpetual inventory method

An accounting method where inventory levels are updated in real-time with each sale and purchase, providing a continuous record of inventory balances.

Inventory method

An accounting approach used to value and manage the inventory of a business, including FIFO (First-In, First-Out), LIFO (Last-In, First-Out), and average cost methods.