What is the main purpose of an income statement?

The main purpose of an income statement is to summarize revenues, expenses, and profitability over a specific period of time, such as a month or a year. This financial document provides a clear overview of how much money a company brings in through its operations (revenues) and how much it spends in order to generate that income (expenses). By subtracting total expenses from total revenues, the income statement reveals the net profit or loss for the period, which is crucial for stakeholders, including investors, management, and creditors, to understand the financial performance of the business.

In contrast, tracking personal expenses focuses more on individual spending rather than the overall financial performance of a business. Calculating tax liabilities is a different financial process that involves additional accounting and legal considerations outside of the income statement's scope. Assessing creditworthiness is typically based on a variety of financial documents and scores rather than just the income statement, as it considers other factors like credit history and debt levels. Thus, option B accurately captures the essence and primary function of an income statement within financial reporting.