Sample Income Statement For Service Company

By examining a sample balance sheet and income statement small businesses can better understand the relationship between the two reports.

Sample income statement for service company. For the year ended december 31 2015. Remember the income statement can be used to track the service business s financial performance for a given month quarter or year. Let us name the company strauss printing services all amounts are assumed and simplified for illustration purposes. Businesses selling physical goods can use the income statement to track changes in returns cost of goods or operating expenses as a percentage of sales to quickly fix issues in the business.

Would have the following heading. Then subtract all operating expenses. An income statement shows the income and expenses of a company over a specified period of time. The balance sheet and the income statement are two of the three major financial statements that.

Examples of service businesses are medical accounting or legal practices or a business that provides services such as plumbing cleaning consulting design etc. Every time a company records a sale or an expense for bookkeeping purposes both the balance sheet and the income statement are affected by the transaction. This financial statement can also be used to track revenue and expenses to plan annual budgets and sales projections along with determining what areas of the business are over budget or under budget. Since service based companies do not sell a product the income statement will not contain cost of goods sold.

The purpose of income statements. Paul s guitar shop inc. An income statement is just one of the many documents included in a financial statement which also includes other financial reports like the balance sheet and cash flow statement also called the profit and loss statement the income statement focuses on the revenue and losses of the company basically providing the company an overall view of their gains and. Investors and business managers use the income statement to determine the profitability of the company it is one of three major financial statements required by gaap generally accepted accounting principles.

Here is a sample income statement of a service type sole proprietorship business. All income statements have a heading that display s the company name title of the statement and the time period of the report. For example an annual income statement issued by paul s guitar shop inc. Introduction by kristin 1 comment service companies have the most basic income statement of all the types of companies.

The income statement format above is a basic one what is known as a single step income statement meaning just one category of income and one category of expenses and prepared specifically for a service business. Since service based companies do not sell a product the income statement will not contain cost of goods sold. Service companies have the most basic income statement of all the types of companies.