Which financial statement provides a flow statement of income and expenses?

The income statement is the financial statement that provides a flow statement of income and expenses. It summarizes the revenues earned and expenses incurred during a specific period, typically a quarter or a year. The primary purpose of the income statement is to show the company's performance regarding profitability over that time frame. It calculates the net income by subtracting total expenses from total revenue.

This statement is crucial for stakeholders, including investors and management, as it reflects the company's ability to generate profit through its operational activities. By focusing on the flow of income and expenses, the income statement enables users to assess trends in revenue and expenses, which can influence future planning and decision-making.

While the cash flow statement also reports on cash generation and expenditures, it focuses more on cash transactions during a period rather than net income. The balance sheet presents a snapshot of assets, liabilities, and equity at a specific point in time rather than performance over a period. The equity statement reflects changes in equity but does not provide a detailed account of income and expenses.