Income Statement Accounting Format

The difference is computed and subjected to income tax to get the net income.

Income statement accounting format. An important component of financial statements of an entity is statement of comprehensive income. The income statement format includes details such as the company s name the title stating income statement the period covered and other key components as discussed above. All revenues and gains are presented first followed by all expenses and losses. The actual format of the income statement will vary depending on the business but in general income statements begin with sales followed by expenses and end with the profits or losses of the business.

After reading this article you will learn about the format of income statement. A format of an income statement is very important as it is the means of communication of operating results to outsiders. Single step income statement the single step statement only shows one category of income and one category of expenses. The statement shows the profitability of a business over an accounting period.

Example following is an illustrative example of an income statement prepared in accordance with the format prescribed by ias 1 presentation of financial statements. In income statement there is a standard format that is used while preparing the income statement of the company which reports the sales revenue figure of the business at the start then it adds other income into it after that all the business expenses are deducted from the total amount of revenue and other income generated and finally we get the amount of net profit loss of the business entity. For a business entity performance is measured in terms of profit. Income statements can vary slightly depending on whether the statement is a single step income statement or multi step income statement.

There are different. The income statement format above is a basic one what is known as a single step income statement meaning just one category of income and one category of expenses and prepared specifically for a service business. This format is less useful of external users because they can t calculate many efficiency and profitability ratios with this limited data. Introduction to income statement.

The accounting period can be any length but is usually a month or a year. It is sometimes referred to as a statement of operations income and expense statement or a profit and loss account statement. Single step income statement format. Income statement also known as profit loss account is a report of income expenses and the resulting profit or loss earned during an accounting period.

The main purpose of this statement is performance measurement.