Income Statement Format For Service Company

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.

Income statement format for service company. Income statements show how much profit a business generated during a specific reporting period and the amount of expenses incurred while earning revenue. Illustration 4 2 income statement boc hong company income statement for the year ended. Since service based companies do not sell a product the income statement will not contain cost of goods sold. Since service based companies do not sell a product the income statement will not contain cost of goods sold.

The statement covers the company s financial performance for a given period a month quarter or even year. While income statements vary widely in appearance the overall format remains the same. The income statement also called a profit and loss statement is one of the major financial statements issued by businesses along with the balance sheet and cash flow statement. It is more rep resentative of the type found in practice.

The income statement can either be prepared in report format or account format. Tag archives for service company income statement income statements for service companies. Remember the income statement can be used to track the service business s financial performance for a given month quarter or year. Here is a sample income statement of a service type sole proprietorship business.

For example consider the income statement shown in illustration 4 3 for boc hong company. Then subtract all operating expenses. Therefore the income statement will be a basic breakdown of income and expenses. Introduction by kristin 1 comment service companies have the most basic income statement of all the types of companies.

Examples of service businesses are medical accounting or legal practices or a business that provides services such as plumbing cleaning consulting design etc. Let us name the company strauss printing services all amounts are assumed and simplified for illustration purposes. Service companies have the most basic income statement of all the types of companies. It is an accounting tool which describes about the revenues and expenses through both operating and non operating activities.

This statement is a condensed version of the more detailed income statement presented in illustration 4 2. Revenues less expenses equal net. The income statement also called the profit and loss statement is a report that shows the income expenses and resulting profits or losses of a company during a specific time period.