Income Statement
The income Statement has everything to do with identifying whether the
business made a profit or loss for the year.
The income Statement deals with sales, cost of inventory, income and
expenses.
2 sections of the I/S consist of the trading section and profit and loss.
The trading section calculates the gross profit and profit and loss
calculates net profit or net loss for the year.
Each item must be listed individually with an amount
Section 1: Trading Section
Sales/Revenue XX
LESS COST OF SALES (Just a heading)
● Add opening Inventory x
● Add Purchases x
● Less Purchases Returns (x)
● Less goods for own use (x)
● Add Carriage Inwards x
● Less Closing Inventory (x)
XX
Gross Profit (Total Sales less Total Cost of Sales)
Section 2: Profit and Loss Each item must be listed individually with
an amount
ADD: OTHER INCOME (Just a heading)
● Rent Received x
● Commission Received x
● Profit on Asset disposal x
● Bad debt recovered x
XX
The income Statement has everything to do with identifying whether the
business made a profit or loss for the year.
The income Statement deals with sales, cost of inventory, income and
expenses.
2 sections of the I/S consist of the trading section and profit and loss.
The trading section calculates the gross profit and profit and loss
calculates net profit or net loss for the year.
Each item must be listed individually with an amount
Section 1: Trading Section
Sales/Revenue XX
LESS COST OF SALES (Just a heading)
● Add opening Inventory x
● Add Purchases x
● Less Purchases Returns (x)
● Less goods for own use (x)
● Add Carriage Inwards x
● Less Closing Inventory (x)
XX
Gross Profit (Total Sales less Total Cost of Sales)
Section 2: Profit and Loss Each item must be listed individually with
an amount
ADD: OTHER INCOME (Just a heading)
● Rent Received x
● Commission Received x
● Profit on Asset disposal x
● Bad debt recovered x
XX
