What are the two main elements of the Income Statement?

The main elements of the Income Statement are indeed revenue and expenses. The purpose of the Income Statement is to provide a summary of a company's financial performance over a specific period, typically detailing how much money the company earned (revenue) and how much it incurred in costs (expenses).

Revenue represents the inflows of economic benefits resulting from the company's primary operating activities, such as sales of goods or services. Expenses, on the other hand, are the outflows or costs incurred in the process of earning that revenue, including costs of goods sold, operating expenses, and taxes.

The difference between total revenue and total expenses results in net income or loss, which is a crucial indicator of the company's profitability during that period. This relationship between revenues and expenses is foundational to understanding a company’s financial health, as it shows how efficiently the business generates profit.

In contrast, assets and liabilities relate to the Balance Sheet, while equity and dividends pertain to the company’s ownership structure and profit distribution. Sales and growth, although relevant to a business’s performance, do not capture the core financial elements that the Income Statement aims to represent.