Which financial statement shows revenues and expenses over a period?

Which financial statement shows revenues and expenses over a period?

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

Answer: (A)

Revenues and expenses are tracked over a period to measure profitability, which is shown on the income statement. This statement covers a span of time (a month, quarter, or year) and lists all revenues and all expenses, producing net income or net loss for that period. The balance sheet, by contrast, is a snapshot of assets, liabilities, and equity at a single point in time. The cash flow statement tracks cash inflows and outflows during the period, while the statement of changes in equity shows how owners’ equity changes over the period. So the one that reports revenues and expenses over a period is the income statement, which also reveals net income or loss.

Revenues and expenses are tracked over a period to measure profitability, which is shown on the income statement. This statement covers a span of time (a month, quarter, or year) and lists all revenues and all expenses, producing net income or net loss for that period. The balance sheet, by contrast, is a snapshot of assets, liabilities, and equity at a single point in time. The cash flow statement tracks cash inflows and outflows during the period, while the statement of changes in equity shows how owners’ equity changes over the period. So the one that reports revenues and expenses over a period is the income statement, which also reveals net income or loss.