An income statement also called as the profit or loss account of any organization, is a financial statement of any organization and mentions the organizationâ€™s revenues and expenses for a certain period. Simply put, it mentions the difference between whatever money is poured in by the organization- in any form, such as raw material procurement, overhead expenses, distribution, etc. – and the money brought in by that investment. In other words, it is the revenue earned minus the expenses are borne by the organization.
One must not mistake the Income statement (represents the cash flow over a period of time) with the Balance Sheet (represents a single moment in time). This statement calculates the organizationâ€™s accounting performance over a period of time. It is an important characteristic of any organizationâ€™s valuation.
This assists the managers and the investors to analyze if the organization has made money or lost it for that period. It also supports the investors to analyze the past performance of the organization and predict the future performance. You can also look through income statement homework answers to get a detailed idea.
The income statement homework answers command careful attention as it requires a lot of expenses to be considered. Therefore, it becomes crucial for students to pay attention while solving problems of Income Statements. A single point omitted could lead to a different answer overall.
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