Which of the Following Statements About an Income Statement Is

question 40

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 matches revenues earned during a period,against expenses incurred in earning the revenues.
• C) The expenses may include depreciation.
• D) For revenue to be included,it is not necessary for cash to have been received.

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, often derived from the company's profits.

Accounting Equation

The foundation of double-entry bookkeeping, stating that Assets = Liabilities + Owners' Equity.

Excess Space

Excess space refers to the additional or unused space within a property or facility that exceeds the current needs of the occupants or users.

Materiality Constraint

An accounting principle that allows for the exclusion of insignificant financial information from reports because it would not impact decision-making.