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how Income and expense to influence the decisions (for primary users of GPFS)?

Accounting Aug 17, 2020

how Income and expense to influence the decisions (for primary users of GPFS)?

Expert Solution

The main objective of income expense statement is to show the investors and management whether the entity made profits or suffered losses during the period being reported. Income statements would assist the creditors and investors to determine the past financial performance of an entity, assess the enterprise capability to generate future revenue streams, and predict performance in future through the reporting of income and expenses. It is important document for investors that require detailed information; and income and expense provides all the data on operational efficiency to other non operational aspects and from sales to profits. From an investment perspective, the shareholders are keen to know company's net income because the dividends will be paid out of the total income

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