Wikiaccounting

Understanding of Depreciation and Amortization on the Income Statement

Overview: Depreciation and amortization expenses are the expenses records in the income statement over the period due to charging on the uses of tangible and intangible non-current assets based on the depreciation method under the company accounting policies. The depreciation methods of the tangible and intangible assets are really depending on the types of assets, […]

Understanding of Depreciation and Amortization on the Income Statement Read More »

Other income in the income statement (Explained)

Financial Statements

Overview: Other income records in the income statement normally refer to the types of incomes that are not related to or generated from the main operation of an entity. Those incomes included a gain on disposal of assets, gain on revaluation of assets, interest incomes from sales on credit which is overdue, interest from the

Other income in the income statement (Explained) Read More »

Interest Expenses: Definition, Example, Formula, and Explanation

Financial Statements

Definition: Interest expenses that are recorded in the income statement referred to costs charged to the entity by the bank, creditor and other lenders as the result of fund borrowing for periods of time. Those borrowing included bonds, loan, convertible debt, and credit charged. Interest expenses are partially tax-deductible and the amount charged is based

Interest Expenses: Definition, Example, Formula, and Explanation Read More »

Interest income: Definition, Explanation, Journal Entries and Example

Financial Statements

What is interest income? Interest comes that record in the income statement referred to non-operating income or other income that entities earned during the periods of time from their investment. Investment here included short-term deposit, long-term or fixed deposit, saving account, due credit charged to customers, and similar kinds. For example, the company might have

Interest income: Definition, Explanation, Journal Entries and Example Read More »

Understanding Gross Profit in the Income Statement

Financial Statements

Overview: Gross profit is the profit after eliminating products or services cost of goods sold from the total net sales. These profits are recorded in the entity’s income statement and are not recorded in the balance sheet. Gross profit is not the net earning for the company, but the gross earning that entity receives after

Understanding Gross Profit in the Income Statement Read More »

What Are Operating Expenses on the Income Statement?

Financial Statements

Definition: Operating expenses are the operating costs that occurred by an entity as the result of its daily operating activities and are recording the income statement based on the accrual principle during the period that those expenses occurred. These costs are different from the cost of goods sold since they are not directly associated with

What Are Operating Expenses on the Income Statement? Read More »

What Are Net Sales On Income Statement? (Formulare and Calculation)

Financial Statements

Overview: In the income statement, net sales or total sales revenues are the same things. Net sales during the period are the gross sales after deducting sales return and sales discount that entity made to customers during the period. The total net sales value during the period usually is present in the income statement, and

What Are Net Sales On Income Statement? (Formulare and Calculation) Read More »

Understanding Net Profit or Income on Income Statement (Formula, Example, and Explanation)

Financial Statements

The main purpose of any business entity is profit generation. Any business undertakes varying operations to earn revenues and work profitably. The operating activities of a business form the accounting cycle around the financial year. The activities are recorded in books of accounts and used to prepare the financial statements of the company. Different financial

Understanding Net Profit or Income on Income Statement (Formula, Example, and Explanation) Read More »

7 types of Income Statement Ratios – Explained with Example

Financial Statements

Overview: An income statement is a statement that records all kinds of revenues and expenses that occurred in the entity for a specific period of time. This statement is sometimes called a statement of financial performance since it shows how good or bad an entity’s performance is compared to other periods or entities. There are

7 types of Income Statement Ratios – Explained with Example Read More »

Are Sales and Revenue the Same in the Income Statement?

Q$A

Sales, Sales Revenues, or Revenues are what appear at the top of the income statement, of the entity at the period of time and they generally refer to the total revenues that the company makes during the period. Sales Revenues are the number of sales the company generated during the period of time. And this

Are Sales and Revenue the Same in the Income Statement? Read More »