Question

In: Accounting

Which of the following is a difference between balance sheets and income statements? a. Balance sheets...

Which of the following is a difference between balance sheets and income statements?

a. Balance sheets are also known as profit and loss statements, whereas income statements are also known as statements of financial position.
b. Balance sheets are used to track a business's liquidity, efficiency, and profitability over time compared to other businesses in its industry, whereas income statements are quantitative plans through which managers decide how to allocate available money to best accomplish company goals.

c. Balance sheets require managers to justify every expenditure every year, whereas income statements do not require any such justifications

d. Balance sheets provide a snapshot of a company's financial position at a particular time, whereas income statements show what has happened to an organization's income, expenses, and net profit over a period of time.

Solutions

Expert Solution

Option D is correct.

Balance Sheet is also called Statement of Financial Position. Income Statement is also called Statement of Financial Performance.

ekkarill92 answered 2 years ago
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