Which of the Following Statements Indicates That a Company Earned

question 108

Multiple Choice

Which of the following statements indicates that a company earned a net income for the period?

• A) The sum of the credits exceeds the sum of the debits in the Balance Sheet columns on the end-of-period spreadsheet.
• B) The sum of the credits exceeds the sum of the debits in the Income Statement columns on the end-of-period spreadsheet.
• C) The sum of the debits exceeds the sum of the credits in the Income Statement columns on the end-of-period spreadsheet.
• D) Cash inflows exceed cash outflows.

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Definitions:

Evaluate

To judge or determine the significance, worth, or quality of something through careful examination and analysis.

Accounting Cycle

The series of steps followed by an organization to record financial transactions and prepare financial statements over a specific accounting period.

Depreciation

Systematically dividing the cost of a tangible asset across its life of utility.

Financial Statements

Papers detailing a business's financial status, comprising the income statement, balance sheet, and statement of cash flows.