Asked by Chris Hughes on May 22, 2024
Verified
The biggest difference between the income statement and the balance sheet is:
A) the income statement shows incoming deposits, while the balance sheet shows account balances from the bank.
B) the income statement is submitted to the government, while the balance sheet is shown to investors.
C) the income statement is always more accurate than the balance sheet.
D) the balance sheet represents flows at a point in time, while the income statement reflects flows over a time period.
Income Statement
A financial document that shows a company's revenues, expenses, and net income over a specific period, typically a quarter or year.
Balance Sheet
A document that provides a snapshot of an organization's financial status by listing its assets, obligations, and the equity of its shareholders at a given time.
Account Balances
The amount of money in a financial repository at any given moment, which can change with deposits and withdrawals.
- Acquire knowledge of the essential principles of the double entry system and identify the variances between the balance sheet and income statement.
Verified Answer
KM
kaitlyn magoonaughMay 27, 2024
Final Answer :
D
Explanation :
The balance sheet is a snapshot of a company's assets, liabilities, and equity at a specific point in time, while the income statement shows a company's revenue, expenses, and profit or loss over a period of time (usually quarterly or annually). Therefore, the biggest difference between the two is that the balance sheet represents flows at a specific moment, while the income statement reflects flows over a time period. The other choices are incorrect.
Learning Objectives
- Acquire knowledge of the essential principles of the double entry system and identify the variances between the balance sheet and income statement.