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