Which of the Following Statements Regarding the Income Statement Is

question 89

Multiple Choice

Which of the following statements regarding the income statement is INCORRECT?

• A) The income statement shows the cash flows and expenses at a given point in time.
• B) The income statement shows the flow of revenues and expenses generated by a firm between two dates.
• C) The last or "bottom" line of the income statement shows a firm's net income.
• D) The first line of an income statement lists the revenues from the sales of products or services.

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Definitions:

Transposition

The error of switching the order of digits in numbers, often leading to inaccuracies in financial or data records.

General Ledger

A comprehensive record of all financial transactions over the life of a company, used to prepare financial statements.

Nominal Account

An accounting ledger account that starts each new accounting period with a zero balance and ends with a closed balance to transfer to a real account.