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Simple English definitions for legal terms
statement of income
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A quick definition of statement of income:
A statement of income, also known as an income statement or profit-and-loss statement, is a report that shows all the money a business earned and spent during a certain time period. This report includes all the revenue (money earned), expenses (money spent), gains (money earned from selling assets), and losses (money lost from selling assets) of the business. It is different from a balance sheet, which shows the financial position of a business at a specific point in time.
A more thorough explanation:
A statement of income, also known as an income statement, is a financial document that shows all the revenues, expenses, gains, and losses that a business has incurred during a specific period of time. It is used to determine the profitability of a business and to assess its financial performance.
For example, a company may create an income statement for the first quarter of the year, which would show all the money the company earned from sales, as well as all the expenses it incurred during that time, such as salaries, rent, and supplies. The income statement would then subtract the expenses from the revenues to determine the company's net income or loss for that period.
The income statement is an important tool for businesses to track their financial performance and make informed decisions about their operations. It is often used by investors, creditors, and other stakeholders to evaluate a company's financial health and potential for growth.