Income Statement
In practice for financial accounting, we ever knew cost of goods sold ( for merchandising company) or cost of products sold ( for manufacturing company) that are shown in income statement, but we rare saw cost of service ( for service company) in income statement. Below are forms of income statement for each company: Example 1-Income Statement for Merchandising Company
Continue reading Income Statement Format by Nature of Expense The expenses in an income statement are either classified by their nature or by their function. An income statement by nature method is the one in which expenses are disclosed according to their nature such as office rental, salary expense, Office supply expense, depreciation depreciation etc. There is no reallocation of these expenses
Continue reading Equation in Income Statement Income statement ( sometime called profit or loss account) is reported summary about net profit or loss for company. Equation in income statement : Net profit/(loss) = revenue – expense or Net profit/(loss) = main revenue – main expense + gain – loss if revenue is greater than expense, it is called net profit. If revenue
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