INCOME STATEMENT is one of the statement in the financial statements. It shows the Company’s revenues and expenses during a particular period. It indicates how the revenues are transformed into the net income or net profit.
Unlike Statement of Financial position, Income statement contains account that are nominal. Nominal accounts are general ledger accounts that are closed at the end of each accounting year.
Sa previous chapter, na-discuss ko na ang Statement of Financial Position or Balance Sheet na it contains REAL accounts which defines na that not close at the end of accounting period. So here, Income Statement or Profit and Loss Statement naglalaman ng account which is NOMINAL. Meaning, it does close at the end of reporting period. Kung mapapansin niyo, sa Balance Sheet, ang nakalagay is AS OF THE YEAR; while in Income Statement it shows FOR THE YEAR ENDED. Always remember, AS OF- Balance Sheet and FOR THE YEAR – Income Statement.
Ang Financial Statements ay parang domino effect. Kung mali ang isang statement, mali na ang lahat. And also take note that hindi makakagawa ng Balance Sheet nang hindi pa tapos ang Income Statement.
REVENUE is defined as the total amount of money the business receives from its customers for its products and services. While INCOME refers to net profit.
Para sa pagpapatuloy ng previous example na halo-halo, Let’s say na each halo-halo price is P25.00. Kunyari may bumili sa ‘yo ng isang halo-halo. Magkano ang revenue and income?
Balikan natin ‘yung definition ng revenue, total amount of money receives from customers. So ibig sabihin, ang revenue natin ay P25.00. Pero magkano ang income natin? Since may revenue tayo na 25php, magkano ang nagastos natin sa isang halo-halo? Let’s say na 20php- ingredients, plastic cup and kutsara. Revenue na 25php less 20php ang income natin ay 5php.
Examples of revenue accounts include: Sales, Service Revenues, Fees Earned, Interest Revenue, and Interest Income.
Ang revenue account ay depende sa line of business ng isang Company. Kung nagtitinda ka ng halo-halo, Sales. Kung nag-rerebond ka naman, Service Revenue. Kung isa ka namang bank, Interest Revenue.
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Ps. Mag search kayo ng samples ng Balance Sheet and Income Statement. Browse niyo lang. Para while reading my discussion, may picture na pumapasok sa utak niyo.
Pps. Who can recommend me a good kdrama? Haha.. I like romcom genres tsaka action na may mystery or detectives😆.
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Introdution to Accounting
RandomCalling the attention of all aspirant soon to be CPA'S and any other related courses to stop by and read this book. This is a taglish book for better understanding of explanations. Read in order to learn. Listen in order to understand. So what ar...
