{"id":258289,"date":"2025-07-18T05:55:06","date_gmt":"2025-07-18T05:55:06","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=258289"},"modified":"2025-07-18T05:55:08","modified_gmt":"2025-07-18T05:55:08","slug":"which-financial-statement-reports-revenues-and-expenses","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/07\/18\/which-financial-statement-reports-revenues-and-expenses\/","title":{"rendered":"Which financial statement reports revenues and expenses"},"content":{"rendered":"\n<p>Which financial statement reports revenues and expenses?<\/p>\n\n\n\n<p> A Statement of retained earnings <\/p>\n\n\n\n<p>B Income statement <\/p>\n\n\n\n<p>C Balance sheet <\/p>\n\n\n\n<p>D Statement of cash flows<\/p>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\">The correct answer and explanation is:<\/mark><\/strong><\/p>\n\n\n\n<p>The correct answer is <strong>B) Income statement<\/strong>.<\/p>\n\n\n\n<p>The income statement is the financial document that reports a company\u2019s revenues and expenses over a specific period, typically a quarter or year. The primary purpose of this statement is to provide a clear picture of a company\u2019s profitability during that time frame. It starts with the company\u2019s total revenues or sales and deducts the expenses incurred to generate those revenues, resulting in either a net profit or a net loss.<\/p>\n\n\n\n<p>The income statement can be broken down into several key sections:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Revenues<\/strong>: This section shows the total amount of money earned from the sale of goods or services before any expenses are deducted.<\/li>\n\n\n\n<li><strong>Cost of Goods Sold (COGS)<\/strong>: This is the direct cost associated with producing the goods or services sold by the company.<\/li>\n\n\n\n<li><strong>Gross Profit<\/strong>: This is the difference between revenues and COGS. It represents the basic profitability of the core business operations.<\/li>\n\n\n\n<li><strong>Operating Expenses<\/strong>: These include the expenses related to the normal functioning of the business, such as salaries, rent, and utilities.<\/li>\n\n\n\n<li><strong>Operating Income<\/strong>: This is calculated by subtracting operating expenses from the gross profit.<\/li>\n\n\n\n<li><strong>Non-operating Income and Expenses<\/strong>: This section includes items like interest income, interest expense, or gains and losses from investments.<\/li>\n\n\n\n<li><strong>Net Income or Net Loss<\/strong>: This is the bottom line of the income statement, showing the overall profitability of the company after all revenues and expenses have been accounted for.<\/li>\n<\/ol>\n\n\n\n<p>In comparison, the other financial statements serve different purposes:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>A) Statement of retained earnings<\/strong> reports the changes in the company&#8217;s retained earnings over a period.<\/li>\n\n\n\n<li><strong>C) Balance sheet<\/strong> shows the company\u2019s assets, liabilities, and shareholders\u2019 equity at a specific point in time.<\/li>\n\n\n\n<li><strong>D) Statement of cash flows<\/strong> details the cash inflows and outflows over a period, showing the company\u2019s liquidity position.<\/li>\n<\/ul>\n\n\n\n<p>Thus, the income statement is the key document for understanding a company\u2019s financial performance.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Which financial statement reports revenues and expenses? A Statement of retained earnings B Income statement C Balance sheet D Statement of cash flows The correct answer and explanation is: The correct answer is B) Income statement. The income statement is the financial document that reports a company\u2019s revenues and expenses over a specific period, typically [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-258289","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/258289","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=258289"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/258289\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=258289"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=258289"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=258289"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}