Income Statement Expenses Revenues

The income statement summarizes a company s revenues and expenses over a period either quarterly or annually.

Income statement expenses revenues. Revenues and expenses appear on the income statement as shown below. Notice that the year to date net income bottom line of the income statement increased stockholders equity by the same amount 180. This is a simple equation that shows the profitability of a company. The income statement comes in two forms multi step and single step.

Reports how much of the firms earnings were retained in the business rather than paid out in dividends. For a trading company like abc co. Again expenses are decreases in owners equity from costs that are incurred to generate revenues. The three main elements of income statement include revenues expenses and net income.

Also known as the profit and loss statement or the statement of revenue and expense the income statement primarily focuses on the company s revenues and expenses during a particular period. What is a multi step income statement. If revenue is higher than expenses the company is profitable. After the entries through december 3 have been recorded the balance sheet will look like this.

Well there are two principles that guide a company in determining when to record expenses on the income statement. 3 elements of income statement. Revenues are the incomes that the company generates from the sale of goods or services or other activities related to the main operation of the company s business. One is the matching principle.

Summarizes the firms revenues and expenses over an accounting period. If revenue is lower than expenses the company is unprofitable. Reports the impact of a firms operating investing and financing activities on cash flows over an accounting period.