Revenues and expenses are reported in the:

• A. Statement of Cash Flows
• B. Statement of Retained Earnings
• C. Income Statement
• D. Balance Sheet

Answer: (C)

Verified step by step guidance

1. Understand the purpose of each financial statement: The Income Statement reports a company's revenues and expenses over a specific period, showing the net income or loss. The Statement of Cash Flows focuses on cash inflows and outflows, the Statement of Retained Earnings tracks changes in retained earnings, and the Balance Sheet provides a snapshot of assets, liabilities, and equity at a specific point in time.
2. Identify the key elements of the problem: Revenues and expenses are financial performance metrics that are used to calculate net income or loss. These are not directly related to cash flows, retained earnings, or the balance sheet.
3. Recall the structure of the Income Statement: It begins with revenues, subtracts expenses, and arrives at net income or loss. This makes it the correct financial statement for reporting revenues and expenses.
4. Eliminate incorrect options: The Statement of Cash Flows deals with cash transactions, not revenues and expenses. The Statement of Retained Earnings focuses on changes in retained earnings, and the Balance Sheet does not report revenues or expenses.
5. Conclude that the Income Statement is the correct answer because it is specifically designed to report revenues and expenses, providing a clear picture of a company's financial performance over a period.