Like the balance sheet, the income statement reports the status of an organization over some period.

• A. True
• B. False
• C. Not applicable
• D. Sometimes

Answer: (B)

Timing of financial statements matters: a balance sheet is a snapshot of financial position at a single date, while the income statement shows performance over a period. The statement is false because the balance sheet does not report status over a period; it records assets, liabilities, and equity at one point in time. In contrast, the income statement tracks revenues and expenses across a period (like a month, quarter, or year), culminating in net income. For example, you’d prepare a balance sheet as of December 31, 2025, and an income statement for the year ended December 31, 2025.