Income Statement Of A Business

An income statement is an accounting term financial statement that displays the profitability at a given time as newer technologies lead to an increased change in the business world it becomes mandatory to effectively make a good statement of income.

Income statement of a business. The current period plus two prior periods. It shows the profit or loss made by the business which is the difference between the firm s total income and its total costs. Normal practice is to include three accounting periods on an income statement. It communicates to users how much revenue the company has generated during the period and the cost incurred by it in connection to generating such revenues.

Income statements summarize the financial activities of a business during a particular accounting period which can be a month quarter year or some other period of time that makes sense for a business s needs. This is very important for an organization to know their profitability. The income statement is a historical record of the trading of a business over a specific period normally one year. Definition of income statement the income statement presents information on the financial results of a company s business activities over a period of time.

For example you can use microsoft excel to prepare a good and effective document. The profit or loss is determined by taking all revenues and subtracting all expenses from both operating and non operating activities. The income statement serves several important purposes. An income statement reports the following line items.

Also called the profit and loss statement the income statement focuses on the revenue and losses of the company basically providing the company an overall view of their gains and losses in a specific period. An income statement also called a profit and loss statement lists a business s revenues expenses and overall profit or loss for a specific period of time. The income statement is one of three statements. An income statement otherwise known as a profit and loss statement is a summary of a company s profit or loss during any one given period of time such as a month three months or one year.