What is the relationship fixed between expenses and revenues as described in an income statement?

In an income statement, expenses are directly related to revenues, and the relationship is reflected through subtraction. The income statement outlines a company's financial performance over a specific period, detailing how much revenue was generated and what expenses were incurred to generate that revenue. By subtracting total expenses from total revenues, one can determine the net income or loss for the period.

This structure highlights the importance of both revenues and expenses in evaluating a company's profitability. Revenues indicate the total income earned from operations, while expenses represent the costs associated with generating that income. The subtraction process reveals how much profit remains after covering all expenses, establishing a clear and systematic way to assess financial health.