Which of the Following Is Not True of the Income

question 70

Multiple Choice

Which of the following is not true of the Income Statement of a company that was formed 10 years ago?

• A)Reports a Net Loss for the year if expenses are more than revenues.
• B)Reports the financial effects of activities that have occurred since the company's inception.
• C)Reports the amount of the increase in stockholders' equity this year as a result of the company's operations.
• D)Reports Net Income which is not an account in the ledger.

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Definitions:

Analyze Transactions

The process of examining financial transactions to understand their nature, how they affect the accounts, and how they should be recorded in the accounting system.

Correcting Entries

Journal entries made to amend previously recorded transactions or entries that were made incorrectly.

Balance Sheet Account

A financial statement line item that represents the assets, liabilities, and shareholders' equity at a specific point in time.

Income Statement Account

An account found on the income statement that records business transactions affecting the company's revenue, expenses, gains, and losses.