Question

State whether the following is True or False:

The statement of profit and loss account shows the operating performance of an enterprise for a period of time.

Answer 1

This statement is true.

Explanation:

The statement of profit and loss (income statement) reports an entity’s revenues, expenses and resulting profit or loss for a specific accounting period, so it reflects the enterprise’s performance over that period. The multi‑step P&L even separates operating income from non‑operating items, which lets users assess operating performance specifically.