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Revenues resulting from various business transactions such as the sales of products or services to customers begin the statement. Next listed are the expenses resulting from the costs associated with the everyday operations of the company. Finally, the difference between the revenues and expenses results in the net income or net loss. For example, in the income statement, the net profit for the month or year is determined as shown in Figure 1.
Figure 1. Principles of Accounting, 2007
The importance of this statement provides the user with data on the profitability of the company. Additionally, the income statement shows the costs and expenses associated with earning the revenue (Beginners Guide to Financial Statement, 2007)...
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