Explain why the income statement can also be called a$$ "profit$-$and$-$loss $($P&L$)$ statement." What exactly does the word balance mean in the title of the balance$$ sheet? Why do we balance the two$$ halves?

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Part $1$

Explain why the income statement can also be called a$$ "profit$-$and$-$loss $($P&L$)$ statement."$($Select from the$$ drop$-$down menus.$)$

In reviewing the income statement of a profitable$$ company, one can see that it begins with

$$

net loss after taxes

operating expenses

net profits before taxes

sales revenue

gross profits

cost of goods sold

net profits after taxes

taxes

operating profits $($EBIT$)$

interest expense

at the top and ends with

$$

cost of goods sold

operating profits $($EBIT$)$

gross profits

net profits after taxes

sales revenue

net profits before taxes

operating expenses

net loss after taxes

interest expense

taxes

at the bottom. Had there been a loss for the$$ year, the final result would have been a

$$

net loss after taxes

operating expenses

interest expense

net profits before taxes

sales revenue

operating profits $($EBIT$)$

cost of goods sold

net profits after taxes

taxes

gross profits

$.$