DECA Financial Consulting Practice Exam 2025 - Free DECA Financial Consulting Practice Questions and Study Guide

The main purpose of an income statement is to show revenues and expenses over a specific period, which ultimately reflects the company's financial performance during that timeframe. This financial statement details how much money the company earned from its business activities (revenues) and the costs incurred (expenses) to generate those earnings. By subtracting total expenses from total revenues, the income statement reveals the net income or loss for that period. This information is crucial for stakeholders, including investors, management, and creditors, to assess the company's profitability and operational efficiency.

In contrast, the other options focus on different aspects of financial statements that do not capture the essence of an income statement. For instance, providing a snapshot of a company’s assets relates to the balance sheet, which details what the company owns at a given point in time. Highlighting long-term investments pertains to asset categorization rather than performance over time. Compiling a list of liabilities is also characteristic of the balance sheet, which outlines what the company owes. Therefore, the income statement distinctly serves the purpose of summarizing financial results related to revenues and expenses for a specified period.