What Is Income Statement Quizlet

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What is income statement quizlet. Start studying income statement balance sheet. 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 is also useful in predicting information about future cash flows e g the amounts timing and uncertainty of cash flows based on past performance. Start studying income statement.

Learn vocabulary terms and more with flashcards games and other study tools. 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. Also sometimes called a net income statement or a statement of earnings the income statement is one of the three most important financial statements in financial accounting. The income statement is one of a company s core financial statements that shows their profit and loss over a period of time.

An income statement is a financial statement that shows you how profitable your business was over a given reporting period. The income statement indicates whether the company is profitable but this might not explain whether cash increased or decreased the income statement does not directly measure the change in value of a company during the period estimation plays a key role when measuring income. The income statement lists a company s revenue expenses and taxes with its after tax profit at the very bottom over a period of time what is the criteria for an item to appear on the income statement. It shows your revenue minus your expenses and losses.

The income statement is useful in determining profitability value for investment purposes and credit worthiness. Examples of service businesses are medical accounting or legal practices or a business that provides services such as plumbing cleaning consulting design etc.