22.

Visualize an average U.S. manufacturing company, and think about its income statement.

Statement 1: It reports only a firms cash revenues and cash expenses, so that a firms cash profit or loss can be identified.

Statement 2: Generally the first item reported in the statement is the firms Net sales, while the last reported item is its Net income.

Statement 3: Among the expenses that are reported on an income statement are the costs of manufacturing and selling the firms goods, its general and administrative costs, and its depreciation and amortization expenses, and taxes.

Statement 4: Its purpose is to describe the firms financial performanceincluding its assets and the methods used to finance its operations.

Statement 5: Its data applies to a specific date in the firms operating year.

Which of the following selections relating to these statements is true?

a. Statements 1, 2, 3 and 5 are correct.

b. Statements 3 and 5 are correct.

c. Statements 2 and 3 are correct.

d. Statements 1, 2, 3 and 4 are correct.