Income Statement Revenue Accounts

This is a contra account containing discounts granted to customers from the gross sale price.

Income statement revenue accounts. A few of the many income statement accounts used in a business include sales sales returns and allowances service revenues cost of goods sold salaries expense wages expense fringe benefits expense rent expense utilities expense advertising expense automobile expense depreciation expense interest expense gain on disposal of truck and many more. If revenue is higher than expenses the company is profitable. The p l formula is revenues expenses net income. Assets are having debit balance.

This means that income including revenue is recognized when it is earned rather than when receipts are realized although in many instances income may be earned and received in the same accounting period. The income statement is one of a company s core financial statements that shows their profit and loss profit and loss statement p l a profit and loss statement p l or income statement or statement of operations is a financial report that provides a summary of a over a period of time. 1 the exact wording may vary but you can look for terms like gross revenue gross sales or total sales this figure is the amount of money a business brought in during the time period covered by the income statement. The first line on any income statement or profit and loss statement deals with revenue.

The profit or loss is determined by taking all revenues and subtracting all expenses from both operating and non operating activities. It is shown in the income statement as a deduction to sales. Income statement is prepared on the accruals basis of accounting. Sales returns and allowances also a contra revenue account and therefore shown as a deduction to sales.

This is a simple equation that shows the profitability of a company. Could be segregated into additional accounts to record sales for particular products regions or other classifications. Contains revenue from the sale of products and services. The income statement is used to calculate the net income of a business.

All items of revenue income have credit balance and all items of expense loss have debit balance. The income statement accounts most commonly used are as follows. Contains the cost of manufactured goods or merchandise sold during the period. It is the principal revenue account of merchandising and manufacturing companies.

Liabilities and share holders funds are having credit balance. Cost of goods sold.