Watch here video from Accounting Training topic - Income Expense Statement.
Income Expense Statement is a summary of information on business revenue and expenses for the certain accounting period. If considering Balance Sheet, there we have data at the end of the accounting period. In the Income Statement we have data for the period.
Sometimes while being through the accounting training, you might notice that Income Expense Statement is called Statement of Operations as this report provides details about the operations of the business and their result.
Income Expense Statement is prepared following Matching Principle, i.e. sales revenues are included despite that cash for sale of goods or provision of services will be received later. This statement should contain only those expenses which were incurred to earn revenue.
Difference between Revenue and Expenses is a net result of business operations for the accounting period:
In case Revenue minus Expenses is a positive, we will have Net Profit;
In case Revenues minus Expenses is negative, we will have Net Loss.
Watch Accounting Training - Income Expense Statement video below:
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