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  • Acc501 GDB 1

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    Shahbaz Anjum
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    The income statement summarizes a company's revenue and expenses over a period of time. It shows gross profit by subtracting cost of goods sold from revenue, operating expenses to run the business like salaries and utilities, and net earnings or profit and loss. Earnings before tax are calculated by subtracting total expenses from total income to measure financial performance. The cost of sales percentage shows what percentage of sales represents the cost of goods sold. Expenses are costs needed to generate revenue.

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    ACC501 GDB 1

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    The income statement summarizes a company's revenue and expenses over a period of time. It shows gross profit by subtracting cost of goods sold from revenue, operating expenses to run the business like salaries and utilities, and net earnings or profit and loss. Earnings before tax are calculated by subtracting total expenses from total income to measure financial performance. The cost of sales percentage shows what percentage of sales represents the cost of goods sold. Expenses are costs needed to generate revenue.

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    26 views1 page

    Acc501 GDB 1

    Uploaded by

    Shahbaz Anjum
    The income statement summarizes a company's revenue and expenses over a period of time. It shows gross profit by subtracting cost of goods sold from revenue, operating expenses to run the business like salaries and utilities, and net earnings or profit and loss. Earnings before tax are calculated by subtracting total expenses from total income to measure financial performance. The cost of sales percentage shows what percentage of sales represents the cost of goods sold. Expenses are costs needed to generate revenue.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    ACC501 GDB 1

    SOLUTION:

    The income statement is important because it summaries the company revenue in a given period. Gross
    profit shows the revenue generated from sales of goods and services minus the cost of goods sold in
    your business. Operating expense shows how much it costs to run the business. It caters for items such
    as salaries, cost of advertising, depreciation, rents, operating cost and cost of utilities. Net earnings show
    the profit and loss the business made in a given period. Earnings before tax are calculated by subtracting
    expenses from income, before taxes. It measures the company’s financial performance. Cost of sales it
    look at the cost to the percentage of sales meaning what percentage of the cost of sales. Expense is the
    costs that company has to pay in order to generate revenue.

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