Asked by Denise Rodriguez on May 10, 2024
Verified
The traditional income statement is intended to measure profits by identifying cash flows in and out of the firm over an accounting period.
Traditional Income Statement
A financial statement that displays a company's revenues, expenses, and net income over a specific period, typically emphasizing historical cost accounting.
Cash Flows
The net amount of cash and cash-equivalents moving into and out of a business.
- Differentiate between the accounting definition of income and its common understanding, including the methods of computing it.
Verified Answer
DB
Daria'una ButlerMay 12, 2024
Final Answer :
False
Explanation :
The traditional income statement measures profits by identifying revenues earned and expenses incurred over an accounting period, not directly by tracking cash flows.
Learning Objectives
- Differentiate between the accounting definition of income and its common understanding, including the methods of computing it.
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