Section 2
The Income Statement
Book
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Boundless Finance
Finance
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4 concepts
Elements of the Income Statement
The income statement, or profit and loss statement (P&L), reports a company's revenue, expenses, and net income over a period of time.
Limitations of the Income Statement
Income statements have several limitations stemming from estimation difficulties, reporting error, and fraud.
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Effects of GAAP on the Income Statement
GAAP's assumptions, principles, and constraints can affect income statements through temporary (timing) and permanent differences.
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Noncash Items
Noncash items, such as depreciation and amortization, will affect differences between the income statement and cash flow statement.