Income Statement Example

Income statements are something that you’ll come across over and over in college and in your business career, so it’s an important thing to know. Knowing what an income statement template looks like is the first key to understanding income statements. There are a few main concepts that you need to be familiar with to fully understand income statements and what they mean.
The first thing you need to know in order to format an income statement is revenues. Revenues are the income generated from the primary business activities of a business. If you have a flower shop, then the money your earn from flower sales is revenue.

Gains are something else that a lot of people get confused with revenues. A gain would be if you sold some old shears from your flower shop so that you could buy some new ones. You made money from the sale, but it wasn’t from selling flowers, so it’s a gain and not revenue.
The next thing you need to understand is expenses. Expenses are like revenues because they are the costs that you incur in running your business. So again, if you sell flowers, the money you spend on purchasing your flowers is an expense.
Losses are another part of most income statements. Losses occur when a business loses money on a transaction that isn’t involved with the main business. Like the previous example, if you sold your old flower shears to a friend and you lost money on the deal, that would be a loss, it wouldn’t be an expense.
The basic format of any income statement can be summarized as revenues minus expenses equal net income. If you can remember that you’ll always be able to format an income statement.
The last basic concept of an income statement template is to understand that an income statement covers a timer period, where as a balance sheet is more of a snapshot in time.
Income statement templates can help you format financial information correctly and help you make better decisions
Learn more about formatting an income statement example. Stop by our site to learn more about income statement examples and what they can do for you.