![]() What’s the Difference Between a Balance Sheet and Income Statement? ![]() These topics will show you how to prepare an income statement: Income statements show how much profit a business generated during a specific reporting period and the amount of expenses incurred while earning revenue. The income statement, also called a profit and loss statement, is one of the major financial statements issued by businesses, along with the balance sheet and cash flow statement.īalance sheets are snapshot summaries of a company’s assets, debts, and equities.Ĭash flow statements are financial statements that detail the amount of money a company has generated and spent. To prepare an income statement, small businesses need to analyze and report their revenues, expenses and the resulting profits or losses, for a specific reporting period. All you need to do is fill in the empty fields with the numbers you’ve calculated. If you have found yourself struggling to find the time to create your own statement from scratch, a free invoice statement template is the perfect solution.įreshBooks provides free template income statements that are pre-formatted for your needs. ![]() To prepare an income statement, you will need to generate a trial balance report, calculate your revenue, determine the cost of goods sold, calculate the gross margin, include operating expenses, calculate your income, include income taxes, calculate net income and lastly finalize your income statement with business details and the reporting period.
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