Which financial statement would most appropriately report the total annual expenditures of 100 Amazon Prime customers as described in the accompanying data file?

• A. Statement of Cash Flows
• B. Statement of Stockholders' Equity
• C. None of the above; the expenditures of customers are not reported in a company's financial statements.
• D. Income Statement

Answer: (C)

Verified step by step guidance

1. Understand the purpose of each financial statement: The Statement of Cash Flows reports cash inflows and outflows, the Statement of Stockholders' Equity tracks changes in equity, and the Income Statement reports revenues and expenses related to the company's operations.
2. Recognize that financial statements are designed to report the financial activities of the company itself, not the expenditures or financial behavior of its customers.
3. Analyze the problem: The expenditures of Amazon Prime customers are external to Amazon's financial reporting. These expenditures are not part of Amazon's internal financial transactions or operations.
4. Conclude that none of the listed financial statements (Statement of Cash Flows, Statement of Stockholders' Equity, Income Statement) would report customer expenditures, as these are not relevant to the company's financial reporting framework.
5. Understand that customer expenditures might be indirectly reflected in Amazon's revenue figures on the Income Statement, but the total annual expenditures of customers are not directly reported in any financial statement.