What is the primary role of the income statement?

The primary role of the income statement is to detail a company's revenues and expenses over a specific period. This financial report provides valuable insights into a company's operational performance by showing how much money the company earned (revenues) and how much it incurred in costs (expenses) during that timeframe. The resulting figure—net income or net loss—indicates whether the company was profitable over that period or if it incurred more expenses than it generated in revenue.

By comparing revenues and expenses, stakeholders can assess the company's ability to generate profit, which is critical for decision-making purposes. This information aids investors, management, and analysts in evaluating the company's overall financial health and operational efficiency.

The other options, while related to financial statements, do not accurately represent the primary purpose of the income statement. The cash on hand pertains to the cash flow statement, summarizing the financial position at a specific date corresponds to the balance sheet, and tracking equity movements relates to the statement of retained earnings.