Florida General Contractor Practice Exam

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

1. Balance sheet

2. Income statement

3. Statement of cash flows

4. Equity statement

The correct answer is: Income statement

The income statement is specifically designed to show a company's revenues and expenses for a specific period, typically a quarter or year. It details how much money the company earned (revenues) and how much it spent (expenses) during that timeframe, culminating in the net income or loss. This financial statement provides key insights into the company's operational efficiency and profitability, allowing stakeholders to assess the financial performance over time. In contrast, other financial statements serve different purposes. The balance sheet presents a snapshot of a company's assets, liabilities, and equity at a specific point in time, rather than detailing performance over a period. The statement of cash flows focuses on the inflows and outflows of cash, categorizing activities into operating, investing, and financing sections, while the equity statement tracks changes in the ownership interest over time but does not provide a direct view of revenues and expenses like the income statement does.