Which financial statement summarizes a company's revenues and expenses over a specific period?

Which financial statement summarizes a company's revenues and expenses over a specific period?

• A. Balance Sheets
• B. Income Statement
• C. Cash Flow Statement
• D. Statement of Retained Earnings

Answer: (B)

Revenues and expenses are tracked over a defined period, and the amount left after subtracting expenses from revenues shows whether the company earned a profit or took a loss during that time. This is exactly what the income statement does: it presents revenues first, then the related expenses, and finally the net income or net loss for the period (like a month, quarter, or year). The balance sheet is a snapshot of what the company owns and owes at a point in time, the cash flow statement shows actual cash movements over the period, and the statement of retained earnings details how retained earnings changed over the period.

Revenues and expenses are tracked over a defined period, and the amount left after subtracting expenses from revenues shows whether the company earned a profit or took a loss during that time. This is exactly what the income statement does: it presents revenues first, then the related expenses, and finally the net income or net loss for the period (like a month, quarter, or year). The balance sheet is a snapshot of what the company owns and owes at a point in time, the cash flow statement shows actual cash movements over the period, and the statement of retained earnings details how retained earnings changed over the period.