Income Statement

Question 1

What are the 2 sections of an income statement?

Answer 1

Trading = gross profit
Profit and loss = net profit

Question 2

What does the layout of an income statement look like(Retail business)?

Answer 2

Revenue(Sales)
Less: Sales returns
Less: Cost of sales
Opening inventory
+Purchases
-Purchases returns
+Carriage inwards
-Drawings
-Closing inventory
=Gross Profit
+Income
Discount received
Rent
-Expenses
Wages
Salaries
=Net Profit

Question 3

What does the layout of an income statement look like(Service business)?

Answer 3

Fees from clients
Add:Income
Rent
Less: Expenses
Salaries
Wages
Rent
Profit