Income Statement Format Basic Accounting

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.

Income statement format basic accounting. Operating income gross profit total operating expenses income before tax operating income other revenues and expenses net income income before tax income tax. The two primary elements of the income statement are operating and nonoperating income as illustrated in this formula. Net income operating income nonoperating income there are several subelements of operating and nonoperating income such that the formula can be restated as. Presents sales discounts allowances returns and other related information.

There are two income statement formats that are generally prepared. Accounting for limited liability companies. Income statements can vary slightly depending on whether the statement is a single step income statement or multi step income statement. This format is less useful of external users because they can t calculate many efficiency and profitability ratios with this limited data.

Single step income statement the single step statement only shows one category of income and one category of expenses. Zimsec o level principles of accounting. 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. 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.

Sales or revenue section.