Which two major groups of accounts are included on the income statement?

The income statement is primarily concerned with measuring a company's financial performance over a specific period. The two major groups of accounts included on the income statement are revenues (or sales) and expenses.

Revenues indicate the total income generated from business activities, such as the sale of goods or services. This reflects the company's ability to generate sales. Expenses represent the costs incurred in generating those revenues, including costs like salaries, rent, and utilities. By subtracting total expenses from total revenues, the income statement provides critical insights into the company's profitability, as indicated by net income or net loss.

This focus on revenues and expenses is essential for users of financial statements, such as investors and management, to assess the operational efficiency and financial performance of the organization over a given reporting period. Understanding this relationship helps stakeholders make informed decisions regarding the company’s future operations.