The Financial Statement That Reports Whether the Business Earned a Profit

question 71

Multiple Choice

The financial statement that reports whether the business earned a profit and also lists the types and amounts of the revenues and expenses is called a(n) :

• A)Balance sheet.
• B)Statement of retained earnings.
• C)Statement of cash flows.
• D)Income statement.
• E)Statement of financial position.

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Definitions:

Reported Earnings

This refers to the net income that a company officially reports in its financial statements for a specific period, reflecting the firm's financial performance.

Cumulative Preferred Stock

A type of preferred share that has the feature where omitted or unpaid dividends are accumulated and must be paid out before dividends can be issued on the company's common shares.

Common Shareholders

Individuals or entities that own common shares in a corporation, granting them rights to dividends and corporate decisions.

Paid-In Capital

The total amount of cash and other assets paid into the company by investors in exchange for shares of stock.