INCOME

STATEMENTS
Textbook, Chapter 23 [pg 284-293]

Name: …………………………………………………

Class: ……………  

This  example  is  downloaded  from  www.mybusinessstudies.com.    A  comprehensive  website  

for  IGCSE  Business  Studies,  Business  news,  Study  Techniques  and  lots  of  resources  for  
teachers  and  sudents.  
 
  
Learning outcomes:
• Explain why business need to keep accounting records such as income
statements.
• Explain why profits are not the same as cash.
• Explain the importance of profit.
• Differentiate between gross, net and retained profit.
• Identify elements in the income statement.
 
 
 
WHAT ARE ACCOUNTS AND WHY ARE THEY NECESSARY?

Definitions to learn:
Accounts___________________________________________________
___________________________________________________________

Accountants_________________________________________________
___________________________________________________________

Final accounts_______________________________________________
___________________________________________________________

HOW A PROFIT IS MADE?

Profit = Sales Revenue – Cost of making products

Ways to increase surplus by:

a) _____________________________________________________

b) _____________________________________________________

c) _____________________________________________________
This  example  is  downloaded  from  www.mybusinessstudies.com.    A  comprehensive  website   2  
for  IGCSE  Business  Studies,  Business  news,  Study  Techniques  and  lots  of  resources  for  
teachers  and  sudents.  
 
  

WHY IS PROFIT IMPORTANT?

a) Reward for e___________

Explanation: _____________________________________________________
_______________________________________________________________

b) Reward for r_______ t_________

Explanation: _____________________________________________________
_______________________________________________________________

c) S________ of finance
Explanation: _____________________________________________________
_______________________________________________________________

d) Indicator of s___________
Explanation: _____________________________________________________
_______________________________________________________________

UNDERSTANDING INCOME STATEMENTS

Definitions to learn:
Income statements___________________________________________
___________________________________________________________

Gross profit_________________________________________________
___________________________________________________________

This  example  is  downloaded  from  www.mybusinessstudies.com.    A  comprehensive  website   3  

for  IGCSE  Business  Studies,  Business  news,  Study  Techniques  and  lots  of  resources  for  
teachers  and  sudents.  
 
  
Sales revenue_______________________________________________
___________________________________________________________

Cost of goods sold____________________________________________

___________________________________________________________

Trading account______________________________________________
___________________________________________________________

Net profit___________________________________________________
___________________________________________________________

Depreciation______________________________________________
___________________________________________________________

Retained profit______________________________________________
___________________________________________________________

This  example  is  downloaded  from  www.mybusinessstudies.com.    A  comprehensive  website   4  

for  IGCSE  Business  Studies,  Business  news,  Study  Techniques  and  lots  of  resources  for  
teachers  and  sudents.