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What Is an Income Statement? - Purpose, Components & Format

Instructions:

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question 1 of 3

Explain the purpose of an income statement.

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1. Which of the following is the equation used for the basic income statement?

2. How can money be brought into a company?

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About This Quiz & Worksheet

This quiz/worksheet combination will assess your knowledge of the purpose of income statements. To pass the quiz, you will need to be familiar with related terminology, the function of income statements, and other information discussed in the lesson.

Quiz & Worksheet Goals

Assessments will test you on the following:

  • The basic income statement equation
  • Income statements' significance to business owners
  • Components of an income statement

Skills Practiced

Students will practice the following skills:

  • Information Recall- access the knowledge you've gained regarding the meaning of various terms found in income statements
  • Interpreting Information- verify that you can read information regarding the purpose of an income statement and interpret it accurately
  • Reading Comprehension- ensure that you draw the most important information from the What is an Income Statement? - Purpose, Components & Format lesson

Additional Learning

Review the lesson, What Is an Income Statement? - Purpose, Components & Format, to learn more about the purpose of income statements. Objectives covered include:

  • Define income statement
  • Understand the role of an income statement in a financial statement
  • Know when income statements are generated
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