Income statement is a vital financial document that presents overall revenues and expenditures of the business or company in mentioned period of time. One can use a predesigned income statement template to format this document accordingly with all accurate figures and details. It is one of the major financial statements and generally prepared at the end of accounting period. It is used to assess the financial performance and position. In simple word it can be explained as a brief summary of money spent and earned by a business or company in a particular accounting year.
Elements of income statement template
The document calculates net income of a business entity or company by subtracting total expenditures made in the whole year from total income generated by all resources. It is also known as profit and loss statement, statement of profit or loss, revenue statement, statement of financial performance and earnings statement etc. It could be limited to a single page or may contain more than one pages based on what type of information and details are included. Single step and multi step are two different methods that can be used to make income statement. Single step is simpler one and mostly used by small businesses and organizations.
There can be different reasons to prepare this document and major one is to assess the profit or loss generated by the company at the year end. When making an income statement your focus should be on providing only essential and accurate information in a manner that maximizes information relevance to the reader. A readymade income statement template can be used to prepare error free and easy to understand income statement. The template is equipped with customizable elements which means one can easily add required details and information.