Which Statement About the Income Statement Is True

question 75

Multiple Choice

Which statement about the income statement is true?

• A)The focal point of the income statement is the cash account, because that account cannot be manipulated by "accounting tricks."
• B)EBITDA is a truer measure of financial strength than are net income and free cash flow.
• C)If a firm follows the International Financial Reporting Standard (IFRS), its reported net income and net cash flow will be the same.
• D)The income statement for a given year is designed to give us an idea of how much the firm earned during that year.

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Definitions:

Common/Unique Traits

Attributes or characteristics that can be widely shared among individuals or distinctively unique to an individual.

Obvious/Hidden

Pertains to phenomena or characteristics that are readily apparent versus those that are concealed or not immediately noticeable.

Nature and Nurture

The debate regarding the relative contributions of genetics (nature) and environment (nurture) to individual development and behavior.

Free Will

The concept that individuals have the ability to make choices that are not determined by prior causes or by divine intervention.