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What accounts are on an income statement

what accounts are on an income statement

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Write out the heading for the income statement to notify readers of the time period that the statement covers. Place the heading on the first two lines of the spreadsheet, with the first line reading, “Income Statement” followed by the name of the business. Fill out the second line giving the date of the end of the coverage period for the statement -- for example, “Period Ending December 31, 2011.”

Skip a line then open the first section of the income statement with the word “Income” placed to the far left. Place the income amount for the year in a column to the right on the line, unless you wish to break down the income into multiple income types -- for example, cash and accounts receivable. If you do, then go down a line and indent slightly, then place the income group name on the line with the amount of income in that grouping in a column to the right. Use your income reports for the year to determine income amounts and types.

Underline the last income group amount, and on the next line, place the words “Total income” in the far left. Add all of the income groups together and place this total income amount in the column beneath the underlined amount.

Move down another line and write "Less cost of goods sold” in the far left under "Total income." Put the total cost of goods sold during the income statement period under the income amount in the column on the right. Underline the amount and subtract the cost of goods sold from

the total income to calculate the company’s gross profits. Place the result in the same column beneath the underlined amount. In the far left on that same line, under "Cost of goods sold," write “Gross profit.”

Write “Less operating expenses” in the far left on the next line. List each expense type beneath this line, slightly indented from the left of the page, add a small space after each and add the amounts. Expenses include such costs as rent, worker’s pay and office expense. Underline the last expense; under that, place the total along with writing “Total operating expenses” in the column to the far left.

Begin the next line by labeling it “Operating income.” Calculate the operating income by subtracting the total operating expenses from the gross profit. List the result in the right column.

Move down a line. Label the line “Less interest expense” in the far left and place interest expenses for the statement period in the column on the right beneath the operating income. Underline the amount of interest expenses.

Move down another line and label this entry, "Net income before income taxes.” Subtract interest expenses from operating income, and post the result in the far right column.

Begin the next line with the label “Less income taxes,” and then place any income tax amounts in the far right column. Underline the amount.

Write “Net income” on the next line down, and subtract the listed income tax from net income before taxes. Place this number in the far right column under the underlined income tax amount to complete the accrual basis income statement.

Category: Forex

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