Which option best describes an income? (2024)

Which option best describes an income?

Expert-Verified Answer

Which one of the following options best describes an income statement?

An income statement shows a company's revenues, expenses and profitability over a period of time. It is also sometimes called a profit-and-loss (P&L) statement or an earnings statement.

Which of the following best describes comprehensive income?

Answer and Explanation:

Comprehensive income can be defined as a variation in the net assets of a company from non-owner sources, so it is the change in equity during a period of transaction and other events and circ*mstances from only non-owner sources.

Which of the following best describes the purpose of the income statement?

The correct option is C. It identifies an organization's operating effectiveness and net income. The income statement is used by the analysts to determine whether the business entity is operating efficiently or not. It is assessed by considering the statistics of expenses and revenue.

What is the income in finance?

Income is money or value that an individual or business entity receives in exchange for providing a good or service or through investing capital.

Which of the following best describes an income statement quizlet?

Which of the following best describes the income statement? "A summary of the profit-generating activities of a company that occurred during a particular reporting period" and "a summary of the activities that caused cash of a company to change during a particular reporting period" both describe the income statement.

What is in a statement of income?

An income statement is a financial report detailing a company's income and expenses over a reporting period. It can also be referred to as a profit and loss (P&L) statement and is typically prepared quarterly or annually. Income statements depict a company's financial performance over a reporting period.

How do you describe a statement of comprehensive income?

A statement of comprehensive income is a broad financial metric that includes all incomes and expenses that affect a company's financial standing over a period. Shareholders and investors mostly use this financial statement to determine a comprehensive understanding of a company's financial health.

What is an example of comprehensive income?

Comprehensive income explained

A corporation's comprehensive income includes both net income and unrealised income. This unrealised income comes from non-owner sources. For example, it might relate to gains and losses from foreign currency transactions, or unrealised gains from hedge financial instruments.

What is other income on the income statement?

Examples of other income might include: Interest earned on investments or bank deposits. Rental income from a property the company owns. Profit from the sale of a company asset, like a vehicle or property (often referred to as a gain).

What is the main income statement?

The income statement is read from top to bottom, starting with revenues, sometimes called the "top line." Expenses and costs are subtracted, followed by taxes. The end result is the company's net income—or profit—before paying any dividends. This is where the term "bottom line" comes from.

What is the income statement by function?

An income statement by function is the one in which expenses are disclosed according to different functions they are spent on (cost of goods sold, selling, administrative, etc.)

Which of the following best describes assets?

Assets are resources owned or controlled by a company and that have expected future benefits.

Where is income defined?

Section 61(a) of the Internal Revenue Code defines gross income as income from whatever source derived, including (but not limited to) “compensation for services, including fees, commissions, fringe benefits, and similar items.” I.R.C.

What is the definition of income in accounting?

Income (Net Income)

Net Income is the difference between revenue and the cost or expenses incurred by a business in a particular accounting period. It is also known as the profit of a business. Income leads to an increase in the value of assets in a business.

What is the term for income?

1. interest, annuity, gains, return. 2. salary, wages, earnings.

What is an income quizlet?

income. money received on a regular basics for work or through investments.

What is defined as income quizlet?

Income can be defined as a payment received in the form of wages, salary, gifts, royalties,, government payments or investments. Income can be spent on needs or wants and it can also be saved.

Which equations best describes the income statement?

You would use three formulas throughout the income statement: Step 1: Gross profit = net sales – cost of goods sold. Step 2: Operating income = gross profit – operating expenses. Step 3: Net income = operating income + non-operating income.

What are the two types of income statements?

Small businesses have two reporting options when preparing an income statement: you can create a single-step income statement or a multi-step income statement. The format you choose depends on the type of business you own and the ultimate purpose of the income statement you're creating.

What is income statement format?

The income statement can be presented in a “one-step” or “two-step” format. In a “one-step” format, revenues and gains are grouped together, and expenses and losses are grouped together. These amounts are then totaled to show net income or loss.

What are income statement notes?

The notes are used to explain the assumptions used to prepare the numbers in the financial statements as well as the accounting policies adopted by the company. Footnotes are used by both analysts and auditors to better understand the company's financial position.

What is the formula for net income?

It's calculated by subtracting expenses, interest, and taxes from total revenues. Net income can also refer to an individual's pre-tax earnings after subtracting deductions and taxes from gross income.

What is the statement of income and statement of comprehensive income?

The statement of comprehensive income reports the change in net equity of a business enterprise over a given period. The statement of retained earnings includes two key parts: net income, and other comprehensive income, which incorporates the items excluded from the income statement.

What is the difference between income statement and comprehensive income?

Comprehensive income includes realized and unrealized income, such as unrealized gains and losses from the other comprehensive income statement, and, therefore is a more detailed view of a company's net income, which is not fully captured on the income statement.