Accounting: Income Statement Made Easy - property management companie

The income statement or as it is otherwise known the profit and loss statement is basically how much money your company made in a given period of time. It contains some valuable information such as your sales, your expenses, and your net income or profit.

So the income statement usually starts with a first line being the sales. If you have different kind of sales for example two types of activities and would like to define them you could have two lines for sales such as printing, and webdesign. Or if you have received interest as a source of income you would enter it here as well. The next line is if you have any cost of goods sold. So if you are in a manufacturing business, or a jewelry maker, or anything where you buy some material and re-sell it that is when you will have cost of goods sold. Subtracting the Cost of Goods Sold from the sales will give you the gross profit figure.

Next come the expenses that are not directly associated to the sales like the Cost of Goods Sold such as Marketing, utilities, car payments, gas, phone bills, etc

Below that you have the sum of all the expenses incurred in the period you are doing an income statement for.

The difference between the Gross profit and the total of the expenses is the final line of your income statement the Net Income.

That's it your income statement is basically how much profit your company have made at any given period in time.