Which of the Following Statements About the Income Statement of a Company

question 141

Multiple Choice

Which of the following statements about the income statement of a company that was formed 10 years ago is correct?

• 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:

Equivocation

The misleading use of a term with more than one meaning or sense, by glossing over which meaning is intended at a particular time.

Ambiguous Words

Words that have more than one meaning or interpretation, leading to uncertainty or vagueness.

Grammatical Mistake

An error in the use of language rules in writing or speaking.

Red Herring Fallacy

A response is directed toward a conclusion that is different from that proposed by the original argument.