INCOME STATEMENT SHOWS THE INCOME AND EXPENSES OF THE BUSINESS OR ORGANISATION WITHIN A GIVEN PERIOD OF TIME. INCOME CAN ALSO BE REFERRED TO AS (REVENUE OR TURNOVER OR SALES) WHERE AS EXPENSES CAN BE SEEN AS COSTS OR OUTGOINGS.
INCOME STATEMENT OF ANY BUSINESS IS ALSO KNOWN AS P&L ACCOUNT.
Let us now look at the structure of the P&L Account.
NOW LET US CRACK ON TO EACH TERMS IN P&L ACCOUNT:
1: SALES: IS ALSO REFER TO AS TOTAL TURNOVER OR REVENUE OF THE BUSINESS WITHIN A PERIOD OF TIME, IN THE CONCEPT OF ACCOUNTING ACCRUAL CONCEPT. SALES IS SOMETHING REFER TO AS TOTAL NO OF SOLD. IRRESPECTIVE OF WHETHER OR NOT IT HAS BEEN PAID FOR.
2: COST OF SALES: RELATES TO THE COST OF THE THINGS THAT’S BEEN SOLD, THESE COST OF MOSTLY THE VARIABLE COST IN THE BUSINESS. WHERE IT IS SOMETIMES REFER TO AS COST OF GOODS SOLD.
3: OPERATING COST: THIS COST ARE GENERALLY FIXED COST IN NATURE, THEY ARE SUCH AS RATES, RENT, LIGHT AND ELECTRICITY, HEAT AND OVERHEADS.