Income Statement- refers to the amount earned through services rendered or sale of merchandise.
Expenses- refer to the cost of goods or services that are used up in the operation of a particular business entity.The basics of an Income Statement
Revenue- This is the amount you earned (or your sales), and any interests you have earned from those sales.
a.Service Revenue- Revenues earned by performing services for a customer or clients.
b.Sales- Revenues earned as a result of sale of merchandise.
Income AccountsService Income Revenue from fees Sales Rent Income Interest Income
Cost of Sales- The cost incurred to purchase a material to make a product sold to customers during the period; also called cost of goods sold.
Expense AccountAdvertising Expense Travelling Expense Salaries Expense Tax Expense Rent Expense Supplies Expense Utilities Expense Transportation Expense Interest Expense Repairs and Maintenance Expense Insurance Expenses Charitable Contribution expenses Depreciation Expense Tools Expense
Miscellaneous ExpensesGuidelines in Preparing Income Statement
a.The heading of the income statement is always written at the center of the first line statement
b.The expense accounts maybe arranged according to the magnitude or according to relative importance of the information to the user.
c.A peso sign is placed on the first amount in every mathematical operation and on the net income or net loss.
d.A single rule is drawn after every operation of addition and subtraction
e.A double rule is drawn after the net income or net loss.Forms of an Income Statement Presentation
a.Single-step income statement
b.Multiple-step income statement
Equation use in net income or net loss in business
Income- expenses = net income or net loss
Purpose of Income Statement read more on:
The income statement shows which of the following?
How to compute income statement read more on:
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