Income Statement
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22 Terms
What does the income statement do?
Reports revenue, expenses, and gains and losses
Revenue - __1__ + ____ - Losses - Income Tax = ____ or ____
Expenses
Revenue - ____ + __2__ - Losses - Income Tax = ____ or ____
Gains
Revenue - ____ + ____ - Losses - Income Tax = __3__ or ____
Net Income
Revenue - ____ + ____ - Losses - Income Tax = ____ or __4__
(Net Loss)
What is the purpose of the income statement?
Evaluate the financial performance of the business
What is another term for financial performance?
probability
General format for income statement
____1____
-____________ ____________
=________ ________
+________ ________
-________ ________
=________
Gross Revenue
General format for income statement
________
-______2______ ____________
=________ ________
+________ ________
-________ ________
=________
Operating Expenses
Depreciation and Intrest Expense
General format for income statement
________
-____________ ____________
=________3________
+________ ________
-________ ________
=________
Operating Income
General format for income statement
________
-____________ ____________
=________ ________
+________4________
-________ ________
=________
Other Revenues and Gains
General format for income statement
________
-____________ ____________
=________ ________
+________ ________
-________5________
=________
Other Expenses and Losses and Taxes
General format for income statement
________
-____________ ____________
=________ ________
+________ ________
-________ ________
=____6____
Net Income or Net Proffit
Net Income
Difference between revenues and expenses
Revenues
money earned from production or sale of products and gains from operating activities
Gains
financial benefits from various activities
Operating expenses
Amount of money paid for supplies and other costs required to operate the business
any losses from operating activities
Operating income
revenue - operating expenses
Other or misc. revenue
money earned form other types of farm activities besides the production and sale of products and operating gains
Depreciation expense
item related to annually allocating the cost of buying assets
Interest expense
amount of money paid for itnrest on loans from a lender
Net farm income from operations
another version of operating income that includes adjustments