Does the income statement show financial information for a period of time or a point in time?

A) Period of time
B) Point in time

Correct Answer: A) Period

Explanation: The income statement displays financial information for a specific period rather than a point in time. It summarizes a company’s revenues, expenses, and resulting net income or loss over a defined period, typically quarterly or annually.

Another way to think about this is whether or not you can earn money at any specific instant in time. It’s impossible. You need to work for some time in order to earn money. You earn money after a week, month, year of work. Not at one specific point in time.