Income Statement: Revenues & Expenses
The income statement, much like the free pre-formatted MS Excel one you can download from our Media Gallery, reveals revenues, costs of goods sold, expenses, other income, and a net profit (or loss). The income statement template we provide is the most standard format utilized and is recommended by the Small Business Association (SBA).
So, when it comes to income statements vs. balance sheets, all the day-to-day activity posted via journal entries for revenue (sales), cost of goods (inventory, labor costs, etc.), and expenses will determine a company’s profit or loss for an accounting period.
The numbers that fall on the income statement are summary totals pulled from various journals and schedule postings throughout the accounting period, typically each month, and each line item may come from many different departments and expense distributions.
In fact, the trial balance of any financial accounting software program will show a more detailed breakdown of all the line items on the income statement. At times, if the trial balance does not balance, adjusting journal entries may be needed, and the trial balance re-run to reveal an accurate income statement.