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income statement
An income statement or profit and loss account (also referred to as a profit and loss statement (P&L), statement of profit or loss, revenue statement, statement of financial performance, earnings statement, statement of earnings, operating statement, or statement of operations) is one of the financial statements of a company and shows the company’s revenues and expenses during a particular period.
It indicates how the revenues (also known as the “top line”) are transformed into the net income or net profit (the result after all revenues and expenses have been accounted for). The purpose of the income statement is to show managers and investors whether the company made money (profit) or lost money (loss) during the period being reported.
An income statement represents a period of time (as does the cash flow statement). This contrasts with the balance sheet, which represents a single moment in time.
Charitable organizations that are required to publish financial statements do not produce an income statement. Instead, they produce a similar statement that reflects funding sources compared against program expenses, administrative costs, and other operating commitments. This statement is commonly referred to as the statement of activities. Revenues and expenses are further categorized in the statement of activities by the donor restrictions on the funds received and expended.
The income statement can be prepared in one of two methods.The Single Step income statement totals revenues and subtracts expenses to find the bottom line. The Multi-Step income statement takes several steps to find the bottom line: starting with the gross profit, then calculating operating expenses. Then when deducted from the gross profit, yields income from operations.
Adding to income from operations is the difference of other revenues and other expenses. When combined with income from operations, this yields income before taxes. The final step is to deduct taxes, which finally produces the net income for the period measured.
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What is Cost Accounting
What is Cost Accounting a systematic procedure for recording and reporting measurement of the unit cost of manufactured goods in the aggregate and in detail
Miami Bookkeeping Services
Miami Bookkeeping Services Handle all your Daily Accounting Needs recording of financial transactions including purchases, sales, receipts, and payments
How to read an Income Statement
Income statement (also referred to as profit and loss statement (P&L), revenue statement, statement of financial performance, earnings statement, operating statement, or statement of operations) is a company’s financial statement that indicates how the revenue (money received from the sale of products and services before expenses are taken out, also known as the “top line”) is transformed into the net income (the result after all revenues and expenses have been accounted for, also known as Net Profit or the “bottom line”). It displays the revenues recognized for a specific period, and the cost and expenses charged against these revenues, including write-offs (e.g., depreciation and amortization of various assets) and taxes. The purpose of the income statement is to show managers and investors whether the company made or lost money during the period being reported.
How to read a Balance Sheet
How to read a balance sheet In financial accounting, a balance sheet is a summary compiled by the Accountant of the financial balances of an organization
How to Understand the Cash Flow Statement
The Cash Flow Statement Shows Sources of Cash and cash equivalents and breaks the analysis down to operating, investing, and financing activities
Finance 101 For Assisted Living Facilities and Adult Daycare Centers
Finance 101 For ALF or Assisted Living Facilities should focus on two components, cost containment management, and high patient occupancy rates
WHY IS CASH FLOW MORE IMPORTANT THAN PROFIT
Cash Flow More Important is the Income Statement or Balance Sheet, Profit indicates business success, cash flow measures day-to-day basis staying power
Miami Accountants Beginner’s Guide to Providing Advisory Services
Miami Accountants Beginner’s Guide to Providing Advisory Services As a Miami Accountants teaching your small business clients how the income statement and balance sheet dictate operating performance and business longevity, you will solidify your role as trusted Miami Accountants. Miami Accounting Firms operate in a highly competitive market. If your Miami Accountants only offers commoditized services like …
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