Income Tax Expense In Profit And Loss Statement

The function of a p l statement is to total all sources of revenue and subtract all expenses related to the revenue.

Income tax expense in profit and loss statement. Income tax expense is a component that features on the income statement under the heading of other expenses. The profit and loss statement shows only deductible expenses. The amount of tax your business pays is calculated on the net profit. The most important financial statement any business needs is a profit and loss statement called a p l.

After the taxable income is determined the business or individual is liable to pay income tax on that income. It shows a company s financial progress during the time period being examined. A profit and loss p l statement measures a company s sales and expenses during a specified period of time. Sometimes it s called an income statement.

A profit and loss statement p l or income statement or statement of operations is a financial report that provides a summary of a company s revenues expenses and profits losses over a given period of time. The p l statement shows a company s ability to generate sales manage expenses and create profits.