WHAT IS THE PRIMARY PURPOSE OF AN INCOMESTATEMENT?A) TO SHOW THE COMPANY'S REVENUE AND EXPENSESB) TO SHOW THE COMPANY'S ASSETS AND LIABILITIESC) TO SHOW CASH INFLOWS AND OUTFLOWSD) TO REPORT CHANGES IN OWNER'S EQUITY

Explanation of Income Statement: The income statement shows a company's revenues and expenses over a…

Answered: WHAT IS THE PRIMARY PURPOSE OF AN…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter4: The Adjustment Process

Section: Chapter Questions

Problem 3MC: Revenues and expenses must be recorded in the accounting period in which they were earned or...

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Similar questions

Revenues and expenses must be recorded in the accounting period in which they were earned or incurred, no matter when cash receipts or outlays occur under which of the following accounting methods? A. accrual basis accounting B. cash basis accounting C. tax basis accounting D. revenue basis accounting
Which statement is most directly affected by a change to net income? A. balance sheet B. income statement C. statement of retained earnings D. statement of cash flows
Which financial statement shows the financial performance of the company on a cash basis? A. balance sheet B. statement of owners equity C. statement of cash flows D. income statement
When a company recognizes revenue during a period, what does it also recognize in its balance sheet?
Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a company satisfies its performance obligations and expenses are recorded when incurred. Accrual-basis accounting records both cash and noncash transactions when they occur. Generally accepted accounting principles require companies to use cash-basis accounting. The key elements of accrual-basis accounting are the revenue recognition principle, the expense recognition principle, and the historical cost principle.
What is the purpose of the Income Summary account? How does it relate to the revenue and expense accounts?
On which two financial statements would the Retained Earnings account appear? A. Balance Sheet B. Income Statement C. Retained Earnings Statement D. Statement of Cash Flows
Explain how the following items affect equity: revenue, expenses, investments by owners, and distributions to owners.
Which of the following is the principle that a business must report any business activities that could affect what is reported on the financial statements? A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principle
On which financial statement would the Accumulated Depreciation account appear? A. Balance Sheet B. Income Statement C. Retained Earnings Statement D. Statement of Cash Flows
What is the effect on the fundamental accounting equation if supplies are purchased on account? How will the fundamental accounting equation change if supplies are purchased with cash? Explain how this purchase will or will not change the owners equity.
How do revenues and expenses affect the accounting equation?

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WHAT IS THE PRIMARY PURPOSE OF AN INCOME STATEMENT? A) TO SHOW THE COMPANY'S REVENUE AND EXPENSES B) TO SHOW THE COMPANY'S ASSETS AND LIABILITIES C) TO SHOW CASH INFLOWS AND OUTFLOWS D) TO REPORT CHANGES IN OWNER'S EQUITY