Accounting Fundamentals Certification (AFC) Practice Test 2025 – The Comprehensive All-in-One Guide to Exam Success!

The Income Statement is the financial statement that specifically summarizes a company's revenues and expenses over a designated period, typically a quarter or a year. Its primary focus is on the performance of the company during that time frame, detailing how much money the company earned (revenues) versus how much it spent (expenses). The result of this calculation is the net income or loss, which reflects the company's profitability.

The Balance Sheet, while critical to understanding the financial position of a company at a specific point in time, does not encompass the performance aspect related to revenues and expenses. Instead, it lists assets, liabilities, and shareholders' equity.

The Cash Flow Statement provides insights into the inflows and outflows of cash and cash equivalents during a particular period. It tracks how cash is generated and spent, which is distinct from the Income Statement's focus on profitability through revenues and expenses.

The Statement of Equity outlines the changes in equity accounts over a period, showing factors such as retained earnings, issuance of shares, or dividend distributions, but it does not summarize revenues and expenses.

Thus, the Income Statement is the correct choice for summarizing a company's revenues and expenses over a specific period, directly reflecting the company's operational performance.