What is a formal financial statement that presents income, expenses, and net profit or loss for a period?

The Income Statement is a formal financial statement that specifically focuses on summarizing an organization’s revenues, expenses, and the resulting net profit or loss over a specific time period. It serves as a critical tool for stakeholders to evaluate the profitability and operational efficiency of a business during that timeframe. By detailing how much money was earned and how much was spent, it provides a clear picture of financial performance, making it essential for making informed business decisions.

In contrast, the Balance Sheet offers a snapshot of an organization's assets, liabilities, and equity at a specific point in time, while the Cash Flow Statement outlines the flow of cash into and out of the business, detailing liquidity positions. An Expense Report typically tracks specific expenditures but does not provide an overarching view of profitability nor encompass overall income. Therefore, the Income Statement is the appropriate choice for this question as it directly addresses income and expenses over a designated period.