Question

What is an income statement? In an income statement, what does "Sales mean". what does "cost...

  1. What is an income statement?
  2. In an income statement, what does "Sales mean".
  3. what does "cost of goods mean"?
  4. what are "operating expenses'' in the income statement - give an example
  5. in the income statement , what does "Net Income" mean?

Homework Answers

Answer #1

Income statement contains the information of sales, cost of goods, operating expenses , depreciation and tax expenses.
Sales means the revenue obtained by company which is equal to product of quantity and price per quantity.
COGS means cost of goods sold which is the product of quantity of raw materials and cost per quantity.
Costs incurred for the day to day operation of the company is called operating expense. Example rent, salaries to labour,etc.

Net income is the income which available to the company for dividend payments and retained earning. It is obtained by subtracting the revenue from all costs.

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