level: Income Statement
Questions and Answers List
level questions: Income Statement
| Question | Answer |
|---|---|
| what is an income statement | shows the profit or loss made by a company over a set period of time. |
| what is the main purpose of an income statement | to calculate profit |
| what is meant by gross profit | the profit on buying and selling the inventory |
| what is meant by profit for the year | the final profit for the business before tax is deducted gross profit - expenses |
| what two types of profit are calculated in an income statement | gross profit profit for the year |
| what (aside from calculating profit) is the purpose of an income statement | shows level of success in selling products/services can be used to calculate tax to be paid to the government shows where expenses could be reduced aid decision making (eg. to increase selling price) |
| what is this an example of | income statement |