Income Statement Format With Example

An income statement example period.

Income statement format with example. Income statement also known as profit loss account is a report of income expenses and the resulting profit or loss earned during an accounting period. As compared to a single step income statement a multi step income statement examples are more complex. The income statement example is an official document so it can eventually mark a significant change and probably will show the profitability over a definite phase. An income statement prepared for the three months ended june 30 2017 covers the three month period starting from april 1 2017 through june 30 2017.

A properly created income statement will indicate about the financial performance of business as well as briefly tells what may be done to improve the revenues of business. Income statements can vary slightly depending on whether the statement is a single step income statement or multi step income statement. In the budgeted income statement example above we can see that the actual profit for the period is about 8 500 less than what was planned for. An income statement provides information on the financial results of a company s business activities over a period.

Why do businesses prepare income. 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. A monthly income statement provides the bottom line for a business which is the net income or net loss for the month. A monthly income statement includes sections for revenues income cost of goods sold gross profit expenses taxes and net income or net loss.

Sales or revenue section presents sales discounts allowances returns and other related information. Example 2 multi step income statement the multi step income statement format comprises a gross profit section where the cost of sales is deducted from sales followed by income and expenses to reach an income before tax. Its purpose is to arrive at the net amount of sales revenue. This was due to the income being 5 400 less 100 000 94 600 and the expenses such as water and electricity being greater than expected.

Example following is an illustrative example of an income statement prepared in accordance with the format prescribed by ias 1 presentation of financial statements. Income statement format 1. Know the details of income statement and its format with example. For the year ended september 30 2016 means that the income statement covers the 12 month period starting from october 1 2015 through september 30 2016.