- 12 lessons
- 6 quizzes
- 1 week duration
2. The Balance Sheet
3. The Income Statement
4. The Statement of Cash Flows
5. Final Exams
3.1 What is an Income Statement?
The income statement shows the flow of activity and transactions over a certain period of time. The period can be monthly, quarterly, or yearly.
An income statement consists of revenue, expenses, and income.
Revenue – Expenses = Income
Let us see an example of the income statement.
As you can see here, $500,000 is the revenue. It is the only item that seems positive on this list. Rest are there to be deducted from this amount. After removing cost of goods sold, all expenses, and interests and taxes, the Example Corporation is left with $23,000. It is the income.