Define Income Statement In Accounting

One of the main financial statements along with the balance sheet the statement of cash flows and the statement of stockholders equity.

Define income statement in accounting. Income is actually not the money itself. The purpose of the income statement is to show the reader how much profit or loss an organization generated during a reporting period this information is more valuable when income statements from several consecutive periods are grouped together so that trends in the different revenue and expense line items can be viewed. Income statement definition an accounting of income and expenses that indicates a firm s net profit or loss over a certain period of time usually one year. It is one of a company s main financial statements.

The income statement is one of the main four financial statements that are issued by companies. One could think of income as the reason for the inflow of money or the actions that were done to cause the money to flow in that is the income. Businesses report this figure on the income statement whereas individuals report theirs on the form 1040. An income statement is one of the three along with balance sheet and statement of cash flows major financial statements that reports a company s financial performance over a specific accounting.

The purpose of the income statement is to report a summary of a company s revenues expenses gains losses and the resulting net income that occurred during a year. Balance sheet income statement statement of owner s equity and statement. Examples of service businesses are medical accounting or legal practices or a business that provides services such as plumbing cleaning consulting design etc. This should become clearer as we go through the examples below.

The income statement also called a profit and loss statement is a report made by company management that shows the revenue expenses and net income or loss for a period. The income statement contains several subtotals that can assist in. Income is the revenue a business earns from selling its goods and services or the money an individual receives in compensation for his or her labor services or investments. What does income mean.

The money is a separate thing an asset. The income statement is one of a company s core financial statements that shows their profit and loss over a period of time. The income statement is also known as the statement of operations profit and loss statement and statement of earnings. The income statement is also referred to as the profit and loss statement p l statement of income and the statement of operations.