Question

A profit and loss statement is a financial document that shows a company's income and expenses. True or False ?

Answer 1

The correct answer is true.

A profit and loss statement is also called an income statement. This financial statement shows a company’s income for the accounting period and then subtracts the expenses. The difference between a business’s income and expenses in called the net income.

Answer 2

Answer:

True

Explanation:

All companies, whatever their size, need to obtain information on their performance to know if they have achieved positive results, that is, profits or if they have suffered losses as a result of their operation at the end of a certain period. And given that the primary objective of organizations is to maximize profits, it is essential that you rely on tools that allow you to have timely and reliable information for decision making.

The financial statements are a management tool that will help you to have a better view of the financial situation of the company, the resources it has, the results obtained, the cash inflows and outflows that have been presented, the profitability generated, among other aspects of great relevance for the operation and administration of the organization.