Which of the following terms are used to describe an income statement? (2024)

Which of the following terms are used to describe an income statement?

Profit and loss statements. A profit and loss statement, also known as an income statement, shows the profitability of your business over a specific period.

What are the terms of the income statement?

Income Statement (also known as statement of operations, profit and loss statement, or statement of earnings): A financial statement that shows your revenues, expenses, and profit over a specific period of time.

Which of the following describes the income statement?

An income statement shows a company's revenues, expenses and profitability over a period of time. It is also sometimes called a profit-and-loss (P&L) statement or an earnings statement.

Which of the following best describes an income statement quizlet?

Which of the following best describes the income statement? "A summary of the profit-generating activities of a company that occurred during a particular reporting period" and "a summary of the activities that caused cash of a company to change during a particular reporting period" both describe the income statement.

What are the 4 key items that the income statement focuses on?

What Are the Four Key Elements of an Income Statement? (1) Revenue, (2) expenses, (3) gains, and (4) losses. An income statement is not a balance sheet or a cash flow statement.

Which two terms are synonymous with income statement?

You can also use it to find out what areas of your business are under or over budget. It's also referred to as a profit and loss statement or net income statement; and it supports other financial documents like balance sheets, cash flow statements, and a statement of earnings.

What is an income statement quizlet?

An income statement reports the revenues earned less the expenses incurred by a business over a period of time.

Which equations best describes the income statement?

You would use three formulas throughout the income statement: Step 1: Gross profit = net sales – cost of goods sold. Step 2: Operating income = gross profit – operating expenses. Step 3: Net income = operating income + non-operating income.

Which of the following statements most likely describes the role of the income statement?

Answer and Explanation: The correct option is C. It identifies an organization's operating effectiveness and net income. The income statement is used by the analysts to determine whether the business entity is operating efficiently or not.

Which option best describes an income?

The income is the money that a person receives for providing factor services or for selling products, It can be earned in the form of wages for providing labor, rent for providing land, profit from the business, or salary for individuals.

What is another term for a statement of income and expense quizlet?

Another name for the income statement is: Statement of earnings. The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or a year, is called a(n): Income Statement.

Which is a common way of describing net income?

Net income may also be referred to as a company's bottom line, net profit or net earnings. You can find this number at the bottom of your business's income statement. For an individual, net income is a term often used to describe the amount of money you make after taxes and retirement contributions.

What are three key financial statements that should be found in a business plan income statement balance sheet and cash flow statement?

The income statement illustrates the profitability of a company under accrual accounting rules. The balance sheet shows a company's assets, liabilities, and shareholders' equity at a particular point in time. The cash flow statement shows cash movements from operating, investing, and financing activities.

What are 6 parts of an income statement?

What is the most important part of an income statement?

Revenues—The Top Line

Revenues constitute one of the most important lines of the income statement. A company can exist only to the extent that it is able to generate sufficient revenues to cover all of its costs and provide a return to its investors.

What is the most important aspect of the income statement?

Net Earnings

This section is important and shows the profit/loss the business made in a given period. It is important that you compare the current profit figures with the previous ones. If the trend is negative, one must find out why this is so. If it is a new business, compare the results with the expectations.

What are the two types of income statement?

A single-step income statement offers a simple report of a business's profit, using a single equation to calculate net income. A multi-step income statement, on the other hand, separates operational revenues and expenses from non-operational ones and follows a three-step process to calculate net income.

What are the two categories of the income statement?

There are two different types of income statement that a company can prepare such as the single-step income statement and the multi-step income statement. There are two methods that businesses can use to prepare the income statement. Firstly, you can use the single-step approach to prepare your income statement.

What are the types of income and related terms?

Gross income is the total value of your salary or payments, without accounting for any cash outflows. Net income refers to the income left over after subtracting taxes or fees. 1. You discretionary income is the amount you have available after paying for necessary expenses, or money available to budget.

What does the income statement summarize?

The income statement is a summary of the firm's operations over a stated period of time. The main parts of the statement are revenues (gross and net sales), cost of goods sold, operating expenses (selling and general and administrative expenses), taxes, and net profit or loss.

Which two types of information does an income statement provide quizlet?

The income statement reports a company's revenue and expenses and resulting net income or loss for a period of time.

What is another name for the income statement method quizlet?

the income statement is the financial report that details the sales achieved, the money spent on expenses, and the resulting profit generated by a business during a specific time period. Also referred to as the profit and loss statement.

Is the income statement called statement of operations?

The statement of operations is also known as an income statement or a profit & loss statement. A statement of operations is one of the essential financial statements.

What does a good income statement look like?

Your income statement follows a linear path, from top line to bottom line. Think of the top line as a “rough draft” of the money you've made—your total revenue, before taking into account any expenses—and your bottom line as a “final draft”—the profit you earned after taking account of all expenses.

What is the purpose of the income statement?

The purpose of an income statement is to provide financial information to investors, creditors, and readers, whether the company is profitable during the financial year. In the context of corporate finance, the income statement is the record of the company's profit and loss over the financial year.