Which of the following sets of accounts is typically found on an income statement?

• A. Assets, liabilities, and shareholders' equity
• B. Cash flows from operating, investing, and financing activities
• C. Revenues, expenses, gains, and losses
• D. Common stock, additional paid-in capital, and retained earnings only

Answer: (C)

Verified step by step guidance

1. Understand the purpose of an income statement: it reports a company's financial performance over a specific period, focusing on revenues, expenses, gains, and losses to determine net income or loss.
2. Identify the types of accounts typically found on an income statement: these include revenues (sales, service income), expenses (cost of goods sold, operating expenses), gains (profit from asset sales), and losses (losses from asset disposals or other events).
3. Recognize that assets, liabilities, and shareholders' equity accounts are part of the balance sheet, which shows the financial position at a point in time, not performance over a period.
4. Note that cash flows from operating, investing, and financing activities are reported on the statement of cash flows, which details cash inflows and outflows, not income or expenses.
5. Understand that common stock, additional paid-in capital, and retained earnings are components of shareholders' equity on the balance sheet, not income statement accounts.