Income Statement

Balance Sheet depicts a company’s financial position at a specific date. Income statement presents the company’s financial performance or the revenues, expenses, & profit over a period of time.

Revenue is the money that the company generates while expense is the money that the company spends. Net income/loss is the difference between revenues and expenses.

Let’s get back to Juan. Juan is working as the secretary of Jose and paid P110 per day.

We can now prepare Juan’s income statement for the day:

Juan’s Income Statement
For the day ended

Revenue          P110
Fare Expense     (10)
Net income      P100

Notice the income statement characteristics?
1.   Presents the company’s financial performance or the revenues, expenses, & profit.
2.   Over a period of time. In this case, the period of time is one day.

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