Which of the following is a general-purpose financial statement?

• A. Cash budget
• B. Income statement
• C. Budget variance report
• D. Forecast of sales

Answer: (B)

General-purpose financial statements are the standard external reports prepared for a wide audience of users outside the company, such as investors and lenders. They provide a historical view of a company’s financial performance and position and include formats like the income statement, balance sheet, and statement of cash flows. The income statement fits this category because it summarizes revenues and expenses to show profitability for a period, which external users rely on to assess performance and trends. The other options—cash budget, budget variance report, and forecast of sales—are internal planning and control tools used by management to guide operations and performance, not external financial reporting.