Income Statement Of A Service Business

The income statement records all revenues for a business during this given period as well as the operating expenses for the business.

Income statement of a service business. The service company income statement is very basic. The resulting amount is then subjected to income tax. Revenue expenses operating income. 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.

More understanding cost of goods sold cogs. The statement covers the company s financial performance for a given period a. The cost of services is reporting in the entity income statement similar to the cost of sales for the manufacturing or trading company. A typical income statement starts with a heading which consists of three lines.

The income statement is a report showing the profit or loss for a business during a period as well as the incomes and expenses that resulted in this overall profit or loss. Projected income statement abc cleaners year 1 year 2 year 3 revenue residential sales 508 806 596 643 650 256 up sales residential 176 976 207 528 226 176 commercial sales 0 0 0 vehicle cleaning sales. The income statement of a service type business is quite simple. Just remember the basic formula for income 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. Not surprisingly the income statement is also known as the profit and loss statement. Revenue accounts are presented first followed by all of the company s expenses. An income statement shows the net income or net loss of a business.

Other costs that do not directly contribute to rendering service should not include in the cost of services when presenting in the income statement. Like all businesses one of the main financial statements a service company will prepare is the income statement.