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  • Introduction To Income Statement

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    john wong
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    The income statement, also known as the profit and loss account, reports the income, expenses, and resulting profit or loss of a business over an accounting period. It is prepared on an accrual basis, where income is recognized when earned and expenses are recognized when incurred, even if not yet paid. The income statement includes components like revenue, cost of sales, other income, distribution costs, administrative expenses, and other expenses. The purposes of the income statement include planning, obtaining loans, and informing partners about the success of the business. Gross profit is calculated as sales revenue minus the cost of goods sold.

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    INCOME STATEMENT

    Título original

    Introduction to Income Statement

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    The income statement, also known as the profit and loss account, reports the income, expenses, and resulting profit or loss of a business over an accounting period. It is prepared on an accrual basis, where income is recognized when earned and expenses are recognized when incurred, even if not yet paid. The income statement includes components like revenue, cost of sales, other income, distribution costs, administrative expenses, and other expenses. The purposes of the income statement include planning, obtaining loans, and informing partners about the success of the business. Gross profit is calculated as sales revenue minus the cost of goods sold.

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    © All Rights Reserved
    Baixe no formato PPTX, PDF, TXT ou leia online no Scribd
    Sinalizar o conteúdo como inadequado
    27 visualizações6 páginas

    Introduction To Income Statement

    Enviado por

    john wong
    The income statement, also known as the profit and loss account, reports the income, expenses, and resulting profit or loss of a business over an accounting period. It is prepared on an accrual basis, where income is recognized when earned and expenses are recognized when incurred, even if not yet paid. The income statement includes components like revenue, cost of sales, other income, distribution costs, administrative expenses, and other expenses. The purposes of the income statement include planning, obtaining loans, and informing partners about the success of the business. Gross profit is calculated as sales revenue minus the cost of goods sold.

    Direitos autorais:

    © All Rights Reserved
    Baixe no formato PPTX, PDF, TXT ou leia online no Scribd
    Sinalizar o conteúdo como inadequado
    de 6

    Prepared by:

    INTRODUCTION TO
    INCOME
    STATEMENT

    What is Income
    Statement?

    It is also known as Profit & Loss Account


    and will report of income, expenses and
    the resulting profit or loss earned during
    accounting period.

    Basis of preparation

    It is prepared on ACCRUALS basis of


    accounting.
    It means that INCOME (including revenue)
    is recognized when it is earned rather than
    when receipts are realized.
    Conversely EXPENSES are recognized in
    the income statement when they are
    incurred even if they are paid in the
    previous or subsequent accounting periods.

    COMPONENTS

    Revenue
    Cost of sales
    Other income
    Distribution Cost
    Administrative expenses
    Other expenses

    Purpose of Income
    Statements

    Planning ahead.
    Obtaining loans from banks
    Telling prospective business partners
    how succesful business is

    GROSS PROFIT

    It is the excess of sales revenue over


    the cost of goods sold.
    Sales minus cost of goods sold= gross
    profit/gross loss

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