Income statement is the other very important term in accounting (for more information about the first important term – the balance sheet, you can refer to this article: Balance Sheet – Explanation and Examples). It is a financial document that reports how well a company does over a specific period. Most importantly, it contains information about the income and the expenses of the company. And it also shows how much of the income has come from operations and how much from other activities.
In this article I am going to describe what is an income statement. Then, I will cover its parts. And last but not least, I will give specific and easy to understand example.