Income statement

Question 1

Income statement
Why prepare income statement?

Answer 1

Profit & loss statement
Statement of Earning
Is a report of expenses, income and resulting profit or loss earned during an accounting period.

2.Income statement = Performance(profitability)

How much money does enterprise make?

Question 2

METHOD OF PREPARING INCOME STATEMENT

Answer 2

Income Statement Method
Single Step Method
Multiple Step Method-Gross Profit
-Operating Income
- Other Income/losses

Question 3

Income Statement - Single Step Method

Answer 3

All operating revenues and gains are reported first, followed by all operating expenses and other losses.

No separate section is prepared - gross profit.

Question 4

Income Statement - single step methods

Answer 4

revenues
expenses
net income

Question 5

Income Statement - Multiple Step Method

Answer 5

Gross Profit
Operating Income
Other Income/losses

Divided into separate sections, various subtotals are reported.

Involves separate sections for gross profit, operating income, other income/losses, income before income taxes, and net income

Question 6

CASH FLOW STATEMENT

Answer 6

Presents the movement in cash over the period as classified under operating and financing activities.

Cash inflows- profits, sale revenues
cash outflows- operating activities, investing activities