SESKStuff Everyone Should Know
SESK: Stuff Everyone Should Know · sesk.info/founder-profit-and-loss-purpose

Which statement shows whether a business earned a profit?

The profit and loss statement compares revenue with expenses over a period.

Start playing free

  1. Cash flow statement
  2. Profit and loss statement ✔
  3. Customer invoice

Why: A profit and loss statement measures revenue and expenses for a month, quarter, or year. Their difference shows profit or loss for that period.

Huh, didn't know that: The profit and loss statement is also called an income statement.

The dad joke
Why did the income statement study? It wanted a better bottom line.
Like this card?
Play the game

References

Answer: Profit and loss statement. A profit and loss statement measures revenue and expenses for a month, quarter, or year. Their difference shows profit or loss for that period.

  1. Financial Management for a Small Business Participant Guide catalog.fdic.gov/catalog/sfc/servlet.shepherd/document/download/069t000000Bch4LAAR
    A P&L statement measures revenue (also called sales or income) and expenses over a month, quarter or year.
    Checked 2026-10-11.

Think this answer is wrong? Tap "Challenge this answer" on the card in the game and tell us why.

Test yourself in the game

Starting and Running a BusinessHow can a profitable business still run out of cash?Starting and Running a BusinessWhat does cash flow measure?Starting and Running a BusinessHow does a cash flow projection differ from a statement?

That's stuff everyone should know.