Which term is a financial statement displaying earnings, expenses, and profit or loss?

Which term is a financial statement displaying earnings, expenses, and profit or loss?

• A. Total Sales (Revenue)
• B. Profit and Loss Account
• C. Ledgers
• D. External Customers

Answer: (B)

A financial statement that shows earnings, expenses, and profit or loss is the profit and loss account. This document, also known as the income statement in many places, summarizes all revenues and gains and all costs and expenses over a period to reveal the net result—profit or loss—for that period. It’s the focused record of how much money came in versus what was spent, culminating in the final profit or loss figure. Total sales (revenue) is part of what appears on the profit and loss account, but it’s only the top line. Ledgers are the detailed records of individual accounts, not a single statement. External customers are just a source of revenue, not a financial statement.

A financial statement that shows earnings, expenses, and profit or loss is the profit and loss account. This document, also known as the income statement in many places, summarizes all revenues and gains and all costs and expenses over a period to reveal the net result—profit or loss—for that period. It’s the focused record of how much money came in versus what was spent, culminating in the final profit or loss figure.

Total sales (revenue) is part of what appears on the profit and loss account, but it’s only the top line. Ledgers are the detailed records of individual accounts, not a single statement. External customers are just a source of revenue, not a financial statement.