Which of the Following Statements Concerning the Income Statement Is

question 47

Multiple Choice

Which of the following statements concerning the income statement is not true?

• A) The heading must indicate the length of time the report covers.
• B) It shows the change in the entity's cash balance for the period.
• C) If expenses exceed income than a loss has been incurred for the period.
• D) An alternative name is the statement of financial performance.

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in the volume or activity level, allowing for better budgetary control under different operational circumstances.

Actual Activity

The real measure of activity achieved in a given period, such as units produced, machine hours, or labor hours.

Flexible Budget

A budget that adapts or changes according to fluctuations in activity levels or volume.

Fixed Costs

Costs that do not vary with the level of production or sales over a certain range, such as rent, salaries, and insurance.