Income Statement For Tax Purposes

Conversely expenses are recognized in the income statement when they are incurred even if they are paid for in the.
Income statement for tax purposes. The income statement summarizes a company s revenues and expenses over a period either quarterly or annually. Since income tax is to be paid only if there is taxable income companies try to further minimize their taxable income by under reporting profits or showing exaggerated losses. This means that income including revenue is recognized when it is earned rather than when receipts are realized although in many instances income may be earned and received in the same accounting period. Income statement is prepared on the accruals basis of accounting.
The income statement comes in two forms multi step and single step.