Which of the Following Statements About an Income Statement Is

question 21

Multiple Choice

Which of the following statements about an income statement is TRUE?

• A) An income statement provides information on an organisation's profitability at a certain point in time.
• B) An income statement deducts liabilities from assets to determine shareholders' equity.
• C) The revenues may include contributions from owners.
• D) For revenue to be included, it is not necessary for cash to have been received.

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Definitions:

Parent Entity

A company that holds a controlling interest in another company or subsidiary, having significant influence over its operations and financial decisions.

Total Profits

signifies the entire sum of earnings or profits generated by a business before deducting any expenses.

Unrealised Profits

Profits that have been recorded on paper through accounting but have not yet been actualized through cash transactions.

NCI Allocation

The process of distributing the non-controlling interest’s share of equity in the consolidated financial statements.