What is typically documented in an income statement?

The income statement is a financial report that primarily focuses on a company’s financial performance over a specific period of time. It details the revenues generated from sales of goods or services and the costs associated with generating those revenues, which are classified as expenses.

The primary objective of the income statement is to provide a clear picture of how much profit or loss a company has made during the reporting period. By listing revenues and expenses, stakeholders can assess the operational efficiency of the business and evaluate its profitability.

While employee salaries can be considered an expense, they are not the sole focus of the income statement. Assets and liabilities are reported on the balance sheet, not the income statement, and changes in company ownership are documented in the equity section of the balance sheet or in the statement of changes in equity. Therefore, the accurate and comprehensive content of the income statement includes both revenues and expenses, making this the correct choice.