A Question Asked by Stockholders Is,"How Much Profit Did the Company

question 202

Multiple Choice

A question asked by stockholders is,"How much profit did the company make?" What should the stockholder examine to get the most information that will help evaluate the answer to this question?

• A)The balance sheet,because retained earnings represents current profits
• B)The statement of cash flows,as cash inflows and outflows represents current profits
• C)The income statement,since it shows the revenues and expenses for the period
• D)The economic resources of the company

---

Definitions:

Causality

The relationship between cause and effect, often studied to understand how one variable or event influences another within various contexts.

Normative Statement

A statement that expresses a value judgement or an opinion about what ought to be, rather than an objective or fact-based assertion.

Advanced Nation

A term synonymous with developed countries, signifying a country with a high level of economic development and standard of living.

Policy Recommendation

A proposal provided by experts or analysts on specific ways to address a particular issue or to improve a situation.