Financial reporting - primary statements.
A statement that sets out how the net profit or loss for a period is arrived at.
Also known as the statement of profit or loss, profit and loss account or statement of operations.
It shows the revenues earned in a period, matched with the expenditures incurred in the same period, to arrive at a figure of net profit or loss for that period.
Under the 'double entry' accounting convention, income items in the Income statement are Credits (CR) and expenses are Debits (DR) for the period.
- A net profit is a Credit in the Income statement.
- A net loss is a Debit in the Income statement.
Net profits or losses for the period - in the Income statement - feed through in turn to the Shareholders' funds (cumulative retained profits or losses) in the 'bottom half' of the Balance sheet (as at the end of the period).
- Accruals concept
- Accrued income
- Balance sheet
- Cash flow statement
- Deferred income
- Double entry
- Financial statements
- Income statement exposure
- Net profit
- Primary statements
- Profit and Loss account
- Statement of changes in equity
- Statement of comprehensive income
- Statement of profit or loss and other comprehensive income