An income statement focusing on product and period costs has been prepared using "traditional format."
What is income statement?
The income statement is among three primary financial statements used to reflect a company's finances over a certain accounting period, along with the balance sheet as well as the cash flow statement.
Some key features regarding income statement are-
- An income statement, in addition to the balance sheet & statement of cash flows, is one of the three key financial statements that summarize a company's fiscal performance for a specified accounting period.
- Net Income = (Total Revenue + Gains) – (Total Expenses + Losses)
- Total revenue includes both operating and non-operational revenue, whereas total expenses comprise both primary and secondary operations.
- Revenue does not equal receipts. Earned revenue is shown on a income statement. Receipts (cash received and paid out) are not considered receipts.
- An income statement provides vital insights into a company's operations, managerial efficiency, underperforming sectors, and performance in comparison to industry peers.
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