What does an income statement indicate about revenues?

An income statement serves to provide a clear overview of a company's financial performance over a specific period, detailing its revenues and expenses. The statement shows how revenues, which are the earnings generated from the core operations of the business, are ultimately translated into net income after deducting all associated expenses. This critical connection illustrates how effectively a company is converting its sales into profit.

When examining revenues on an income statement, one observes the total revenues generated during the reporting period. From this amount, various costs (like the cost of goods sold and operating expenses) are subtracted to arrive at net income, which represents the profit or loss the company has achieved. This makes option B the accurate reflection of the relationship between revenues and net income as presented in an income statement.

Understanding this flow from revenues to net income is vital for evaluating a company's operational efficiency and overall profitability, thus providing insights for stakeholders on the financial health of the organization.