Which of the following statements about the income statement is true?

The income statement is a key financial document that provides a summary of a company's revenues and expenses over a specific period, typically a quarter or a year. This statement focuses on operational performance, detailing how much money was earned (revenues) and how much was spent (expenses) during that timeframe, resulting in either profit or loss. This information is critical for stakeholders, including management, investors, and creditors, to assess the profitability and operational efficiency of the business.

The other options do not accurately represent the purpose or content of the income statement. For instance, while it is essential for financial reporting, the statement does not detail cash inflows and outflows, which are instead tracked in the cash flow statement. Additionally, it does not show assets and liabilities, as those are reported on the balance sheet. Lastly, while tax considerations are important, the income statement is not exclusively required for tax purposes; it is used for various stakeholders to evaluate overall business performance.