Which financial statement shows revenues and expenses for a period?

Which financial statement shows revenues and expenses for a period?

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

Answer: (B)

The main idea here is profitability over time. Revenues and expenses are tracked across a span of time, and the financial statement that sums these up to show whether the company earned a profit or incurred a loss during that period is the income statement. It starts with revenues, subtracts expenses, and results in net income or net loss for the period (month, quarter, year). Why this one fits: it is specifically designed to capture performance over a defined timeframe, not a single moment. The other statements serve different purposes: the balance sheet shows what the company owns and owes at a specific point in time; the cash flow statement shows actual cash movements during the period; and the statement of changes in equity shows how owners’ equity changed due to transactions and earnings.

The main idea here is profitability over time. Revenues and expenses are tracked across a span of time, and the financial statement that sums these up to show whether the company earned a profit or incurred a loss during that period is the income statement. It starts with revenues, subtracts expenses, and results in net income or net loss for the period (month, quarter, year).

Why this one fits: it is specifically designed to capture performance over a defined timeframe, not a single moment. The other statements serve different purposes: the balance sheet shows what the company owns and owes at a specific point in time; the cash flow statement shows actual cash movements during the period; and the statement of changes in equity shows how owners’ equity changed due to transactions and earnings.