Income Statement Of Accounting

The statement shows the profitability of a business over an accounting period.

Income statement of accounting. What is an income statement. The accounting period can be any length but is usually a month or a year. Examples of service businesses are medical accounting or legal practices or a business that provides services such as plumbing cleaning consulting design etc. In case a trading entity is having subsidiaries or joint ventures then it has to prepare consolidated income statement as well.

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. The income statement is one of the four main accounting statements. In this case the users can use the income statement together with other financial statements such as balance sheet and statement of cash flows to make a business. Discussed below in example 4 the stand alone income statement of a trading entity.

The stand alone income statement means non consolidated income statement. Definition of the income statement. Balance sheet income statement statement of owner s equity and statement. The basic objective of the income statement is to describe the income achieved by the reporting entity during a specific accounting period.

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 the income statement is the first financial statement typically prepared during the accounting cycle because the net income or loss must be calculated and carried over to the. The income statement is one of a company s core financial statements that shows their profit and loss over a period of time. It is sometimes referred to as a statement of operations income and expense statement or a profit and loss account statement. The income statement is one of the main four financial statements that are issued by companies.

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. The income statement provides financial information to the users such as shareholders investors lenders and suppliers on how the company is doing during the accounting period.