Intermediate Accounting, 17th Edition
Intermediate Accounting, 17th Edition
17th Edition
ISBN: 9781119503682
Author: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Publisher: WILEY
Question
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Chapter 4, Problem 1Q
To determine

Income statement: It is a statement of financial records of the company’s monetary performance during the bookkeeping period. The financial data presented briefly in the statements are considered to assess the monetary presentation of the business and its profits and expenditures through functional and nonoperating activities.

To determine the use of income statement to the investors and the creditors.

Expert Solution & Answer
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Explanation of Solution

Justification:

  • The statement provides scope for the investor and creditor to understand the future cash flows.
  • The past or historic performance of the company can be analyzed based on the income statement.
  • The level of risk involved and cost allocation efficiency can be identified using the income statement.
  • The relationship among the various components can be identified by understanding the income statement.
Conclusion

Thus, the uses of income statement are discussed.

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