Question
Question 1 The main purpose of the statement of profit or loss is to __ show the company's performance for a particular period of time. show the capital generated in the company over a particular time period show the main classifications of assets and liabilities used by accountants show the cash movements over a particular period
Answer
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(167 Votes)
Austin
Elite · Tutor for 8 years
Answer
Show the company's performance for a particular period of time.
Explanation
This question aims to determine the main purpose of a company's "profit and loss statement" (also known as an income statement). The profit and loss statement is a financial statement which summarizes the revenues, costs, and expenses incurred during a specific period of time. This financial tool provides information about a company's ability -or lack thereof- to generate profit by increasing revenue, reducing costs, or both. The first statement suggests the function of representing the company's performance for a specific period. This accurately defines the primary purpose of a profit and loss statement. A company's performance is gauged by the profit or loss it makes over a specific period.The other statement offering to 'show the main dawificitiens of assets and flabitises used by xccountants' appears confusing and incorrect both structurally and contextually. The provided words "dawificitiens" and "flabitises" seem incorrect, likely due to misspellings or typographical errors. Even if we try to make educated guesses (for instance, interpreting "dawificitiens" as deviations or deficiencies, and "flabitises" as liabilities), this would divert us to discussing the balance sheet or other financial statements rather than a profit and loss statement. Hence, this can't be the intended information to garner from a profit and loss statement.