Income Statement Service Revenue

The exact wording may vary but you can look for terms like gross revenue gross sales or total sales this figure is the amount of money a business brought in during the time period covered by the income statement.

Income statement service revenue. It is a good practice to arrange expenses according to amount largest to. Therefore the income statement will be a basic breakdown of income and expenses. Also known as the profit and loss statement or the statement of revenue and expense the income statement primarily focuses on the company s revenues and expenses during a particular period. As you can see this example income statement is a single step statement because it only lists expenses in one main category.

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 expense accounts have debit balances so to get rid of their balances we will do the opposite or credit the accounts. Service revenue appears at the top of an income statement and is separated but added to the product sales for a revenue total. Service companies have the most basic income statement of all the types of companies.

The first line on any income statement or profit and loss statement deals with revenue. Single step income statement. Here is an example of how to prepare an income statement from paul s adjusted trial balance in our earlier accounting cycle examples. Since service based companies do not sell a product the income statement will not contain cost of goods sold.

Interest revenue 600 income summary 37 100. The revenue section of an income statement is typically the first section of the report and it can include revenue generated from services rendered or products sold. Net income total revenue total expenses. In the above statement the income account is service revenue.

The credit to income summary should equal the total revenue from the income statement. An income statement is not concerned with cash flow it is concerned with revenues gains expenses and losses in both the operating and non operating activities of the business during a specific period of time. The income that is generated by providing a service selling a product earning interest on investments renting extra office space licensing technologies selling advertising space or licensing the use of your brand name. Expenses are presented after the income accounts.

Other income accounts for service type businesses include professional fees rent income tuition fees etc.