Income Statement Format For Service Business

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 for service business. Now that you have your income and expenses recorded on your income statement you can complete the final step which is subtracting your expenses from your revenue to arrive at net income. Learn how merchandising companies and service companies have to account for different information when preparing an income statement. Other income accounts for service type businesses include professional fees rent income tuition fees etc. Our income statement is a representation of the company s activities for the month of january.

There are many ways to format an income statement. The income statement for a services company the first step of the sample excel sheet income statement includes defining the period of the income statement. 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. An income statement template is a unique document for every business and use as a key element to know about the financial position of a company or business.

The service company income statement is very basic. Expenses are presented after the income accounts. It is an accounting tool which describes about the revenues and expenses through both operating and non operating activities. By getting to know the purpose of each of the reports you can better understand how they differ from one.

The second step includes providing the sales for the month. Income statements can vary slightly depending on whether the statement is a single step income statement or multi step income statement. The differences in income statements can be further understood. Revenue expenses operating income.

In the above statement the income account is service revenue. Just remember the basic formula for income statements. The income statement and the balance sheet report on different accounting metrics related to a business s financial position.