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:
For the day ended
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.