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Answer: What is the Purpose of Income Statement? Income statement is one of the important financial reports of company which is prepared with the purpose of providing the summary of all the revenues and the expenses over the time period in order to ascertain the profit or loss of the company and measuring its business activity over the time period depending upon various requirements of users of income statement. The income statement is the statement of all expenses and income over some time. Every business when preparing the financial statements starts with preparing the income statement for that period. The income statement forms an integral part of the books of accounts. The income statement serves as an indicator for the business, which shows the performance of the company for the period ending every year or whenever the statement is prepared. The purpose is to provide a representation of the company’s performance during a period to the investors and the value of the company, which affects the share price. The income is used to summarize the profitability of the company by classification of revenue and expense accrued in the income statement during that period.
Explanation: Sum this up and there's your answer.
