Classified Income Statement Items

This is also known as a multi step income statement.

Classified income statement items. In accounting the terms sales and revenue can be and often are used interchangeably to mean the same thing. The expenses in an income statement are either classified by their nature or by their function. This approach is used when there are many line items thereby aggregating information for easier comprehension. These statements are detailed financial records of a company over a set period of time.

An income statement by nature method is the one in which expenses are disclosed according to their nature such as depreciation transports costs rent expense wages and salaries etc. When a corporation is owned in part by the public and is responsible to its shareholders it must prepare financial statements. Sales revenue sales revenue sales revenue is the income received by a company from its sales of goods or the provision of services. A classified income statement organizes information better than a single step income statement where revenue and expense line items are simply listed in sequence with no attempt to present sub totals.

The most common income statement items include. A classified income statement is also known as a multi step income statement. This format presents the.