Income Statement Accounting Explained

Income statements are 2 types single step income statement and multiple step income statement for finding net profit or loss an accounting period.

Income statement accounting explained. Income statement shows net profit or net loss arising out of activities of a particular accounting period of any business organization. We will use income statement and profit and loss statement throughout this explanation. The income statement is important because when the accrual basis or method of accounting is used. 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 is one of a company s core financial statements that shows their profit and loss over a period of time. The income statement is one of the main four financial statements that are issued by companies. The profit or loss is determined by taking all revenues and subtracting all expenses from both operating and non operating activities this statement is one of three statements used in both corporate finance including financial modeling and accounting.