Which financial statement reports the net income or loss for a specific period of time?

• A. Balance Sheet
• B. Statement of Retained Earnings
• C. Single-step Income Statement
• D. Statement of Cash Flows

Answer: (C)

Verified step by step guidance

1. Understand the purpose of each financial statement: The Balance Sheet reports the financial position of a company at a specific point in time, the Statement of Retained Earnings shows changes in retained earnings over a period, the Statement of Cash Flows details cash inflows and outflows, and the Income Statement reports the net income or loss for a specific period.
2. Focus on the Income Statement: The Income Statement is specifically designed to summarize revenues and expenses, ultimately calculating the net income or loss for a given period.
3. Recognize the Single-step Income Statement: This format simplifies the reporting process by grouping all revenues together and subtracting all expenses to arrive at net income or loss.
4. Identify the time frame: The Income Statement always covers a specific period, such as a month, quarter, or year, making it distinct from the Balance Sheet, which is a snapshot at a single point in time.
5. Conclude that the Single-step Income Statement is the correct answer because it directly reports the net income or loss for a specific period of time.