Key Features Of Income Statement

The income statement is a key financial report which shows a company s sales or revenue less expenses for the period in question.

Key features of income statement. The purpose of the income statement is to show the reader how much profit or loss an organization generated during a reporting period this information is more valuable when income statements from several consecutive periods are grouped together so that trends in the different revenue and expense line items can be viewed. Income statement and balance sheet overview. 5 000 whichever is higher needs to be disclosed separately. Along with the balance sheet cash flow statement and the statement of changes in owners equity the income statement is also one of the essential means of financial reporting.

Some also call the income statement a statement of profit and loss or p l. 1 the name of profit and loss account has been changed to statement of profit and loss. An income statement is one of the three important financial statements used for reporting a company s financial performance over a specific accounting period with the other two key statements. The income statement totals the debits and credits to determine net income before taxes the income statement can be run at any time during the fiscal year to show a company s profitability.

The income statement summarizes a company s revenues and expenses over a period either quarterly or annually. The income statement shows the business s income expenses gains and losses. The income statement or profit and loss report is the easiest to understand it lists only the income and expense accounts and their balances. 100 000 earlier 1 of total revenue or rs.

Generally accepted accounting practices gaap also refer to this report as statement of income because the income statement shows. The statement is great for analysts to use as a financial performance indicator of a company over a. The income statement comes in two forms multi step and single step. The income statement is one of the important primary financial statements provided by organizations.

The end product of these transactions is net income or loss. Read this article to learn about the features importance and limitations of financial statements. Features of financial statements. Any item of income or expense which exceeds one per cent of the revenue from operations or rs.

It presents the results of a company s operations for a given reporting period. Unnecessary and confusing disclosures should be avoided and all those that are relevant and material should be reported to the public. The financial statements should be relevant for the purpose for which they are prepared. Key features statement of profit and loss.