The Income Statement

Question 0

Expenses

Answer 0

Costs created in the process of generating revenues

Question 1

Income statement

Profit and loss statement

Answer 1

A financial record of a company’s revenues, expenses, and profits over a given period of time

Question 2

Net income

Bottom line

Answer 2

Profit earned or loss incurred by a firm, determined by subtracting expenses from revenues

Question 3

Cost of goods sold

Answer 3

The cost of producing or acquiring a company’s products for sale during a given period
COGS=Beginning Inventory+Net Purchases-Ending Inventory

Question 4

Gross Profit

Gross margin

Answer 4

Amount remaining when the cost of goods sold is deducted from net sales
Gross profits=Net sales-COGS

Question 5

Operating expenses

Answer 5

All costs of operation that are not included under cost of goods sold

Question 6

Net operating income

Answer 6

Gross profit-operating expenses-COGS

Question 7

Selling expenses

Answer 7

Operating expenses incurred through marketing and distributing the product

Question 8

General expenses

Answer 8

Operating expenses incurred in the overall administration of a business

Question 9

EBITDA

Answer 9

Earnings before interest, taxes, depreciation, and amortization

Question 10

Revenues

Answer 10

Income generated from sale of goods and services, other business activities, and investments

Question 11

How are the IS and BS related?

Answer 11

Net income or loss in the income statement are retained earnings in the owner’s equity/net worth section of the balance sheet