Income Statement
- Tags
- finance
Presents revenues and expenses and resulting profit or loss for a specific period of time.
Income is defined as the increase in economic benefit during the accounting period
in the form of:
- inflows (or enhancements) of [Assets](/brain/20210112040430-assets/)
- decrease of [Liabilities](/brain/20210112040528-liabilities/)
Income can be from ordinary activities of the company (revenue) or through other means (gains). To understand the difference consider a pizza company selling pizzas to make money (revenue through sales) and happening to sell a van which they weren't using (gain).
Expenses cause a loss in economic benefit, they can be [see page 35, either] expenses (from ordinary company activities) or losses.
Kinds of [see page 37, Profit]
- Gross Profit - profit from sales minus cost of sales (or producing products)
- Operating Income - Gross profit minus administrative expenses (alongside other income/expenses).
- Net Income - Income after all revenues and expenses (including taxes).