Accounting Question
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Income statement: It is one of the financial statements prepared by an organization. This statement shows the revenues earned and expenses incurred during a period and thereby shows the profit or loss for the period.
Vertical analysis: It is analysis of financial statements where in each line item is shown as a percentage of items taken as a base. On the income statement all the line items are shown as percentage of sales. On the balance sheet, the line items are shown as a percentage of total assets or total liabilities. On the cash flow statement, the cash inflows or cash outflows are shown as a percentage of cash inflows.
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