What is the main function of an income statement?

The primary purpose of an income statement is to report on revenue and expenses over a specific period, allowing stakeholders to understand the financial performance of a business during that timeframe. This statement provides a clear view of the company's profitability by detailing how much money was generated through sales (revenue) and the costs incurred to generate that revenue (expenses). By presenting this information, the income statement enables stakeholders to assess the operational efficiency and profitability of the business, which is essential for decision-making regarding investments, managing operations, or considering future financial strategies.

The other options focus on different financial aspects unrelated to the core purpose of an income statement. Displaying the balance of cash pertains to the cash flow statement, showing changes in equity relates to the statement of changes in equity, and recording fixed asset acquisitions is typically handled in the balance sheet and not within the income statement framework.