Which financial statement provides a summary of a company's revenues and expenses?

The income statement is the financial statement that provides a summary of a company's revenues and expenses over a specific period of time. It is designed to show the profitability of the business by detailing how much money was earned (revenues) and how much was spent (expenses). The difference between these two figures results in the net income or loss, which is a key indicator of financial performance.

Understanding the income statement is crucial for assessing a company's operational efficiency. Investors and analysts use this information to evaluate how well a company is generating profit from its sales and how effectively it is managing its expenses. This statement reflects the company's performance over a defined period, such as a quarter or a year, making it an essential tool for stakeholders observing trends in income and expenses.

The other financial statements serve different purposes: the balance sheet provides a snapshot of a company's financial position at a specific point in time, detailing assets, liabilities, and equity; the cash flow statement summarizes cash inflows and outflows, emphasizing liquidity and cash management; and the statement of stockholders' equity shows changes in equity over a period. While all these statements are crucial for a comprehensive understanding of a company's financial health, the income statement is specifically focused on revenue and expense summary, making it the correct choice