Describe the purpose of the income statement, the balance sheet, ...

[HudsonKB16]

Describe the purpose of the income statement, the balance sheet, and the statement of cash flows.
 
  What will be an ideal response?

Question 2

Kendell Adams owns a software development company. When he first launched his firm, he was careful to hire employees who had the experience he was looking for, were good matches for the positions he had available, and could be properly supervised.
 
  As Kendell's firm has grown, and his need for employees has increased, he is finding that it is increasingly difficult to find employees who have the qualifications he is looking for, are good matches for the positions he has available, and fit within the supervisory framework he has developed. Kendell is dealing with an issue referred to as ________.
  A) adverse hazard
  B) adverse selection
  C) complicated hazard
  D) ethical hazard
  E) moral selection

[ecox1012]

Answer to Question 1

The income statement reflects the results of the operations of a firm over a specified period of time. It records all the revenues and expenses for the given period and shows whether the firm is making a profit or is experiencing a loss. Unlike the income statement, which covers a specified period of time, a balance sheet is a snapshot of a company's assets, liabilities, and owners' equity at a specific point in time. The statement of cash flows summarizes the changes in a firm's cash position for a specified period of time and details why the change occurred. The statement of cash flows is similar to a month-end bank statement. It reveals how much cash is on hand at the end of the month as well as how the cash was acquired and spent during the month.

Answer to Question 2

B

[HudsonKB16]

Excellent

[fatboyy09]

Great answer, keep it coming