What does the Income Statement report?

The Income Statement reports the financial performance of a business over a specific accounting period, typically including revenues, expenses, and net profit or loss. This document details how much money the business earned through its operations and how much it spent, ultimately providing a clear picture of profitability. It focuses solely on income and expenses, reflecting the effectiveness of management in generating profit within the constraints of operational costs.

The other options refer to different financial statements. For instance, the assets and liabilities of the business are reported on the Balance Sheet, which provides a snapshot of the company's financial position at a specific point in time. Cash flow generated from operations is detailed in the Cash Flow Statement, which tracks the cash inflows and outflows related to operational activities. Finally, equity position is also a component of the Balance Sheet, which reflects the residual interest in the assets of the business after deducting liabilities. Each of these reports serves a distinct purpose, making the Income Statement particularly focused on financial performance over time, thus confirming the correctness of the selected answer.