Income Statement Flashcards
What is an income statement?
This calculates the profits made from buying and selling, known as gross profits profit made after expenses are deducted from gross profit known as profit for the year
What is sales revenue?
The amount of money made from selling goods (price x quality)
What is cost of sales?
The amoount of money spet on selling goods/materials (opening inventory + purchases) - closing inventory
What is gross profit?
The profit made from buying and selling (revenue - cost of sales)
What are expenses?
The running costs incurred throughtout the year
What is profit for the rear?
The profit made after expenses are deducted from gross profit
How can profit for the year be improved?
Lowering expenses by finding a cheaper supplies (may reduce quality) or increase price of goods
