What information does the income statement provide?

The income statement is fundamentally designed to summarize a company's financial performance over a specific period, detailing the revenues generated and the expenses incurred, which helps in calculating the profits or losses. This statement provides a comprehensive view of the income and outflows, allowing stakeholders to assess how well the company is managing its sales and costs.

By presenting the revenues and expenses, it highlights the company's operational efficiency and profitability. This information is essential for management decision-making, forecasting, and understanding the overall financial health of the business. Consequently, selecting the option that indicates a comprehensive report of profits and losses, inclusive of both revenues and expenses, accurately reflects the primary purpose of the income statement.