Which financial statement reports a company's revenues and expenses for a specific period?

Which financial statement reports a company's revenues and expenses for a specific period?

• A. Balance Sheet
• B. Income Statement
• C. Cash Flow Statement
• D. Statement of Changes in Equity

Answer: (B)

The main idea here is identifying which financial report shows profitability over a period. The income statement is the one that lists revenues and expenses for a defined span—such as a month or a year—and computes net income (revenues minus expenses). This focuses on performance during that period. In contrast, the balance sheet shows what the company owns and owes at a specific moment in time, the cash flow statement tracks cash movements across operating, investing, and financing activities over a period, and the statement of changes in equity shows how owners’ equity changes during the period. So when a question asks which statement reports revenues and expenses for a period, the correct choice is the income statement.

The main idea here is identifying which financial report shows profitability over a period. The income statement is the one that lists revenues and expenses for a defined span—such as a month or a year—and computes net income (revenues minus expenses). This focuses on performance during that period.

In contrast, the balance sheet shows what the company owns and owes at a specific moment in time, the cash flow statement tracks cash movements across operating, investing, and financing activities over a period, and the statement of changes in equity shows how owners’ equity changes during the period. So when a question asks which statement reports revenues and expenses for a period, the correct choice is the income statement.