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The income statement:

1. summarizes the firms revenues and expenses over an accounting period.
2. reports how much of the firms earnings were retained in the business rather than paid out in dividends.
3. reports the impact of a firms operating, investing, and financing activities on cash flows over an accounting period.
4. states the firms financial position at a specific point in time.

Respuesta :

Answer:

The correct answer is number (1): summarizes the firms revenues and expenses over an accounting period.

Explanation:

The Income Statement is a report that examines the financial performance of a business over a given period. In compliance with Generally Accepted Accounting Principles (GAAP), publicly traded companies will report income statements, balance sheets and cash flow for each quarter and year.

A company's Income Statement shows revenues, expenses and net profits for both operating and non-operating activities.

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