Which of the following statements is correct?

A business calculates net income or loss for tax purposes. Details do NOT have to be reported

on the tax return, but records must be retained by the company to present in the event of an

audit.

The revenues and expenses from a business are reported on Schedule $C$ and the resulting

profit or loss is transferred to Form $1040.$

Businesses attach financial accounting income statements to tax returns and report the profit or

loss reported directly on Form $1040.$