What is a profit-loss statement used to summarize?

What is a profit-loss statement used to summarize?

• A. The cash flow and sales projections for a quarter
• B. Revenues, costs, and expenses during a specific period
• C. The long-term financial goals of a company
• D. The balance sheet comparisons from different financial years

Answer: (B)

A profit-loss statement, also known as an income statement, is used to summarize a company's revenues, costs, and expenses during a specific period. This financial document provides insight into a company's operational performance, illustrating how much profit or loss was generated within that timeframe. By detailing income from sales as well as all associated costs and expenses, it helps stakeholders assess the profitability of the business and make informed decisions based on its financial health. In contrast, the other options pertain to different financial purposes: sales projections and cash flow concern future income and liquidity, long-term financial goals deal with strategic planning outside of specific profitability measures, and balance sheet comparisons involve assessing assets and liabilities over time without providing the income-related insights that a profit-loss statement offers.

A profit-loss statement, also known as an income statement, is used to summarize a company's revenues, costs, and expenses during a specific period. This financial document provides insight into a company's operational performance, illustrating how much profit or loss was generated within that timeframe. By detailing income from sales as well as all associated costs and expenses, it helps stakeholders assess the profitability of the business and make informed decisions based on its financial health.

In contrast, the other options pertain to different financial purposes: sales projections and cash flow concern future income and liquidity, long-term financial goals deal with strategic planning outside of specific profitability measures, and balance sheet comparisons involve assessing assets and liabilities over time without providing the income-related insights that a profit-loss statement offers.