Which financial statement most commonly includes 'Interest Expense'?

The Income Statement is the financial statement that most commonly includes 'Interest Expense.' This is because the Income Statement is designed to report a company's revenues and expenses over a specific accounting period, ultimately determining the net income or loss for that period.

Interest Expense pertains to the cost incurred from borrowing funds, and it represents one of the operating costs a company typically faces. By including Interest Expense on the Income Statement, it allows stakeholders to see how much it costs a company to finance its operations through debt. This helps in assessing the company’s profitability, as well as its ability to manage debt effectively.

In contrast, the Balance Sheet provides a snapshot of a company's financial position at a specific point in time, showing assets, liabilities, and equity, but it does not include specific operating expenses like Interest Expense. The Statement of Cash Flows focuses on the actual cash generated and used during an accounting period, segregating cash flows into operating, investing, and financing activities, rather than detailing the expenses incurred. Lastly, the Statement of Changes in Equity outlines movements within equity accounts, such as retained earnings and stock issuances, and does not detail specific expenses like Interest Expense. Thus, the Income Statement is the appropriate financial statement for conveying this information.