Income Statement Includes Salaries

An income statement provides a detailed look at how much profit a business makes in an accounting period.

Income statement includes salaries. An income statement or profit and loss account also referred to as a profit and loss statement p l statement of profit or loss revenue statement statement of financial performance earnings statement statement of earnings operating statement or statement of operations is one of the financial statements of a company and shows the company s revenues and expenses during a particular period. Income includes operating income plus other incomes. Salaries and wages of a company s employees working in nonmanufacturing functions e g. Boc hong s in come statement includes all of the major items in the list above except for discontin ued operations.

As a rule of thumb cost of goods sold includes the labor materials and overhead costs associated with bringing a product to market. Expenses include the cost of goods sold operating expenses and other expenses. Under the accrual method of accounting the amounts are reported in the accounting period in which. In this statement profit or income is ascertained showing various incomes and expenditures separately in different stages.

Selling general administration etc are part of the expenses reported on the company s income statement. It s one of the three major financial statements that small businesses prepare to report on their financial performance along with the balance sheet and the cash flow statement. Salaries and wages as expenses on income statement. These accounts are usually positioned in the general ledger after the accounts used to compile the balance sheet a larger organization may have hundreds or even thousands of income statement accounts in order to track the revenues and.

Income statement accounts are those accounts in the general ledger that are used in a firm s profit and loss statement. Relied on by banks and other lenders as a reflection of business performance an income statement accounts for sales revenue associated expenses and any dividend distributions to reflect a net profit. What are income statement accounts. Chapter 4 income statement and related information 4 3 illustration illustration 4 2 presents an income statement for boc hong company.

The profit or loss is determined by taking all revenues and subtracting all expenses from both operating and non operating activities this statement is one of three statements used in both corporate finance including financial modeling and accounting. An income statement reports a business s revenues expenses and overall profit or loss for a specific period of time.