Which financial statement shows a company's revenues and expenses over a period of time?

Which financial statement shows a company's revenues and expenses over a period of time?

• A. Balance sheet
• B. Income statement
• C. Cash flow statement
• D. Statement of changes in equity

Answer: (B)

Revenues and expenses over a period are summarized in the income statement, which is also called a profit and loss statement. It shows how much money came in (revenues) and how much went out (expenses) during a specific time frame, such as a month or a year, with the difference yielding net income or loss. This timing aspect matters: the income statement covers a span of time, while other statements focus on different aspects of the business. A balance sheet captures what the company owns and owes at a specific moment. A cash flow statement tracks actual cash inflows and outflows during the period, broken into operating, investing, and financing activities. A statement of changes in equity shows how owners’ equity changes over the period. Because the question is about revenues and expenses over time, the income statement is the appropriate report.

Revenues and expenses over a period are summarized in the income statement, which is also called a profit and loss statement. It shows how much money came in (revenues) and how much went out (expenses) during a specific time frame, such as a month or a year, with the difference yielding net income or loss. This timing aspect matters: the income statement covers a span of time, while other statements focus on different aspects of the business.

A balance sheet captures what the company owns and owes at a specific moment. A cash flow statement tracks actual cash inflows and outflows during the period, broken into operating, investing, and financing activities. A statement of changes in equity shows how owners’ equity changes over the period.

Because the question is about revenues and expenses over time, the income statement is the appropriate report.