Which document summarizes revenue and expenses for a period of time?

The income statement is the document that summarizes revenue and expenses over a specific period of time, typically covering a fiscal quarter or year. This financial statement provides a clear view of a company’s operational performance during that timeframe, detailing how much money was earned (revenue) and how much was spent (expenses) to arrive at net income or profit.

The importance of the income statement lies in its ability to provide stakeholders with insight into the company’s profitability. It allows for comparison across different periods, enabling analysts and investors to spot trends in revenue growth or expense management.

In contrast, other documents like the cash flow statement track the movement of cash in and out of the company, focusing on liquidity rather than profitability. The balance sheet offers a snapshot of the company's financial position at a specific point in time by detailing assets, liabilities, and equity, without measuring income or expenses over a period. The statement of changes in equity reflects changes in ownership equity but does not detail operational revenue or expenses. Thus, the income statement serves a unique purpose in financial reporting, specifically focusing on the performance of an organization over a defined time period.