Section 1
Understanding the Income Statement
Book
Version 3
By Boundless
By Boundless
Boundless Accounting
Accounting
by Boundless
4 concepts
Revenue
Revenue refers to the mechanism by which income enters a company.
Cost of Goods Sold and Gross Profit
Gross profit or sales profit is the difference between revenue and the cost of making a product or providing a service.
Operating Expenses, Non-Operating Expenses, and Net Income
Operating expenses and non operating expenses are deducted from revenue to yield net income.
Income Statement Formats
Income statements are commonly prepared in two formats: multiple-step and single-step.