Income statement:
Mr. W Xang
Income statement for the year ended 31 December 20X6
●Showing the financial performance of a business over a period of time.
●Reports revenue and expenses for the period.
●The sales revenue shows the income from goods sold in the year
●The cost of buying the goods sold must be deducted from the revenue
●The current year’s sales will include goods bought in the previous year, so this opening inventory must be added to the current year’s purchases.
●Some of this year’s purchases will be unsold at 31/12/20x6 and this closing inventory must be deducted from purchases to be set off against next year’s sales.
●The first part gives gross profit. The second part gives net profit.
The I.S. prepared following the accruals concept.
Accrual concept:
●Income and expenses are recorded in the I.S. as they are earned / incurred regardless of whether cash has been received/ paid.
(Sales revenue: income from goods sold in the year, regardless of whether those goods have been paid for.)
，我們將會(huì)及時(shí)處理。