Business Finance
Easy Question Income Statement

Question Description

Need help with my Business question - I’m studying for my class.

Which is correct:

The income statement for a given year say 2012 is designed to give us an idea of how much the firm earned during that year

The focal point of the income statement is the cash account, because that account cannot be manipulated by "accountin tricks"

The reported income of two otherwise identical firms cannot be manipulated by different accounting procedures provided the firms follow GAAP

The reported income of two otherwise identicla firms must be identical if the firms are publicly owned, provided they follow procedurces that are permitted by Securities and Exchange Commisstion

If a firm follows GAAP then its reported net income will be identicla to its reported net cash flow.

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Final Answer

The correct choice is: The income statement for a given year say 2012 is designed to give us an idea of how much the firm earned during that year

Alex Z (997)
Purdue University

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