In financial accounting, what is another common name for the income statement?

• A. Statement of cash flows
• B. Statement of changes in equity
• C. Statement of financial position
• D. Statement of operations

Answer: (D)

Verified step by step guidance

1. Understand that the income statement is a financial report that summarizes a company's revenues, expenses, and profits or losses over a specific period.
2. Recognize that the income statement is also commonly referred to as the 'Statement of Operations' because it reflects the operational performance of the business.
3. Differentiate the income statement from other financial statements: the Statement of Cash Flows shows cash inflows and outflows, the Statement of Changes in Equity shows changes in owners' equity, and the Statement of Financial Position (or Balance Sheet) shows assets, liabilities, and equity at a point in time.
4. Note that the term 'Statement of Operations' emphasizes the focus on the company's operating results, which is why it is a common alternative name for the income statement.
5. Conclude that when asked for another common name for the income statement, 'Statement of Operations' is the correct and widely accepted alternative.