Series 79 practice questioneasyFinancial Statement Analysis
Which of the following financial statements reports a company's revenues and expenses over a specific period of time?
- AIncome statement✓ Correct answer
- BBalance sheet
- CStatement of stockholders' equity
- DStatement of cash flows
Explanation
Why A — Income statement
The income statement (also called the profit and loss statement) summarizes revenues, expenses, and net income over a specific reporting period such as a quarter or fiscal year. The balance sheet, by contrast, is a snapshot of assets, liabilities, and equity at a single point in time. Understanding which statement captures periodic performance versus a point-in-time position is fundamental to financial analysis in investment banking.
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