Which financial statement shows the period's net income?

Which financial statement shows the period's net income?

• A. Balance Sheet
• B. Income Statement
• C. Statement of Cash Flows
• D. Statement of Changes in Equity

Answer: (B)

The period’s net income is shown on the income statement, which summarizes what the business earned and what it spent over a span of time and ends with the bottom-line figure, net income (or loss). This statement specifically tracks profitability across the period, capturing revenues and expenses, including both operating and non-operating items. The balance sheet, by contrast, is a snapshot of what the company owns and owes at a single moment, not how it performed over the period. The statement of cash flows focuses on actual cash movements during the period, not just profitability. The statement of changes in equity shows how owners’ equity changed over time, including items like share issues and distributions. Net income from the income statement also increases retained earnings on the balance sheet, linking the two.

The period’s net income is shown on the income statement, which summarizes what the business earned and what it spent over a span of time and ends with the bottom-line figure, net income (or loss). This statement specifically tracks profitability across the period, capturing revenues and expenses, including both operating and non-operating items. The balance sheet, by contrast, is a snapshot of what the company owns and owes at a single moment, not how it performed over the period. The statement of cash flows focuses on actual cash movements during the period, not just profitability. The statement of changes in equity shows how owners’ equity changed over time, including items like share issues and distributions. Net income from the income statement also increases retained earnings on the balance sheet, linking the two.