Question at position 22 The financial statement in which the cost of goods sold and expenses are subtracted from total revenue to arrive at a net income figure is a/an ______.income statementbalance sheetcash flow statemententrepreneur’s scorecard

Question

BlackTom AI · Accepted Answer

To tackle this question, I’ll evaluate what each financial statement represents and how it relates to net income.
Option 1: income statement. The income statement is the financial report that subtracts the cost of goods sold and other expenses from total revenue to determine net income (or net loss) for a period. This aligns exactly with the description given in the question.
Option 2: balance sheet. The balance sheet shows a snapshot of a company’s assets, liabilities, and shareholders’ equity at a specific date. It does not directly compute net income, so this option does not fit the described process.
Option 3: cash flow statement. The cash flow statement records cash inflows and outflows from operating, investing, and financing activities. It reveals how cash changes over a period, not the calculation of net income from revenue and expenses, making this choice inaccurate for the described purpose.
Option 4: entrepreneur’s scorecard. This term is not a standardized financial statement and is not used in formal accounting to compute net income. It does not represent a recognized financial statement like the income statement, balance sheet, or cash flow statement.
Overall, the statement that matches the process of subtracting cost of goods sold and expenses from revenue to obtain net income is the income statement.

Question at position 22 The financial statement in which the cost of goods sold and expenses are subtracted from total revenue to arrive at a net income figure is a/an ______.income statementbalance sheetcash flow statemententrepreneur’s scorecard

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