The Three Main Components of an Operating Statement Are Sales

question 21

True/False

The three main components of an operating statement are sales, costs, and profit or loss.

---

Definitions:

Zeros Out

The process of adjusting an account balance to zero, often used in the context of budgeting or closing temporary accounts at the end of an accounting period.

Balance Columns

Columns in an account or ledger used to record the debit and credit balances.

Solvency

Indicates the ability of a company or individual to meet long-term financial obligations; solvency is crucial for staying operational and avoiding bankruptcy.

Liquidity

A measure of how easily assets can be converted into cash without significant loss in value.