Which financial statement summarizes a company's income and expenses over a specified period, usually one year?

Which financial statement summarizes a company's income and expenses over a specified period, usually one year?

• A. Statement of financial position
• B. Statement of comprehensive income
• C. Cash flow statement
• D. Retained earnings statement

Answer: (B)

The statement that summarizes a company's income and expenses over a specified period, typically one year, is the statement of comprehensive income. This financial statement provides a detailed view of a company's profitability by listing all revenue sources and expenses incurred during that time frame. It ultimately shows the net income or loss for the period, which is key for stakeholders in evaluating the company’s financial performance. This statement also includes other comprehensive income items that may not be part of net income, thereby offering a broader perspective on the company's overall financial health. By integrating net income with these additional components, stakeholders can gain insights into factors affecting equity that are not captured in the traditional income statement. The statement of financial position, on the other hand, provides a snapshot of the company's assets, liabilities, and equity at a specific point in time. The cash flow statement tracks the movement of cash in and out of the business, illustrating liquidity but not overall profitability. The retained earnings statement outlines changes in equity related to retained earnings but does not encapsulate the full scope of income and expenses over a period. Thus, the statement of comprehensive income is the correct choice for summarizing income and expenses.

The statement that summarizes a company's income and expenses over a specified period, typically one year, is the statement of comprehensive income. This financial statement provides a detailed view of a company's profitability by listing all revenue sources and expenses incurred during that time frame. It ultimately shows the net income or loss for the period, which is key for stakeholders in evaluating the company’s financial performance.

This statement also includes other comprehensive income items that may not be part of net income, thereby offering a broader perspective on the company's overall financial health. By integrating net income with these additional components, stakeholders can gain insights into factors affecting equity that are not captured in the traditional income statement.

The statement of financial position, on the other hand, provides a snapshot of the company's assets, liabilities, and equity at a specific point in time. The cash flow statement tracks the movement of cash in and out of the business, illustrating liquidity but not overall profitability. The retained earnings statement outlines changes in equity related to retained earnings but does not encapsulate the full scope of income and expenses over a period. Thus, the statement of comprehensive income is the correct choice for summarizing income and expenses.