The income statement: A) reports the amount of an organization’s assets, liabilities, and owner’s equity at the end of a period.
B) consists of three sections – (1) operating activities, (2) investing activities, and (3) financing activities.
C) reports the revenues and expenses for a period of time based on the matching concept.
D) reports the changes in owner’s equity for a period of time.
The correct answer is C) reports the revenues and expenses for a period of time based on the matching concept.
Explanation: The income statement is a financial report that shows an organization’s revenues and expenses over a specific period. It follows the matching principle, which means that it matches revenues earned with the expenses incurred in generating those revenues within the same period to provide an accurate picture of profitability.
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