List Five Purposes of the Income Statement

question 66

Essay

List five purposes of the income statement.

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Definitions:

Fixed Costs

Costs that do not change in total with changes in the volume of production or sales, such as rent, salaries, and insurance.

Relevant

Pertaining to something that is closely connected or appropriate to the matter at hand, especially in decision making or problem-solving.

Decision

The act of making a choice among various alternatives.

Opportunity Costs

The value of the next best alternative that is foregone as a result of making a decision, used in evaluating the relative cost of different choices.