Income Statement

The Income Statement, also referred to as a profit and loss statement, statement of incomes and losses, or report of earnings, discloses the income the business has earned during the accounting period, the costs or expenses that were incurred by the business during the period and the difference between the costs and incomes for the period, or net profit (or loss).

The account type assigned to each Chart of Accounts number dictates the format of the Income Statement. The format of the statement is as follows:

Account Type

Totals

Formula for Total

Income

Cost of Goods Sold

Gross Profit

Income - Cost of Good Sold

Expense

Net Income(Loss) From Operations

Gross Profit - Expense

Other Income

Other Expense

Interest Paid

Net Income(Loss) Before Taxes

Net Income(Loss) From Operations + Other Income - Other Expense - Interest Paid

Income Taxes

Net Income(Loss)

Net Income(Loss) Before Taxes - Income Taxes