Basics of the Income Statement
The income statement is a summary of the business' revenue, expenses, and transactions. The statement presents the net income or net loss for an accounting period. It is essential for the business owners, creditors, and other interested parties to understand the income statement. A businessperson will succeed or fail based on his or her ability to earn revenues in excess of the expenses. Once a business is acquired and commences, revenue and expenses play important parts in its operation.
The basic terms you need to familiarize while understanding income statement are: