Income Statement Flashcards
What is an income statement?
Shows revenue and expenses for the business
It shows the business’ net worth
What is revenue?
Income received by the company
Examples of revenue?
Fees Earned (based on my labour, time etc)
Sales (I have products along with my service based business.
Interest Earned
Revenue
What are expenses?
Money paid out in order to provide a service (measured over a period of time)
Examples of expenses?
Wages or salaries, Utilities, Rent Expense
What is the equation for net income?
NET INCOME = Revenue - Expenses
Also referred to as either Net Profit (Revenue > Expenses) or
Net Loss (Revenue < Expenses)
How is revenue organized in an income statement?
Listed in order of significance (inside column / largest - least)
How is expenses organized?
Listed alphabetically (inside column)
