The Income Statement

The Income Statement (or Profit and Loss Account) is basically the organisation’s record of sales and costs for a specified period of time, usually a month, quarter or year. The bottom line of the Income Statement is the bottom line of the organisation or the net profit or loss.

The simplest equation to describe an Income Statement is:

The Income Statement does not include capital transactions such as investments, fixed assets or borrowing; however, it does include the current income and costs related to these items such as interest and depreciation.

The diagram below illustrates a typical format of an Income Statement:

A typical format of an Income Statement

Watch the video below and read it together with pages 97 to 100 in the Learner Guide. We advise that as you go through the video you make notes in your LG and check if you understand.

Click here to view a video that explains the Income Statement.

Lecturer Broadcast

Click here to learn more about the income statement and the format of the Income Statement.

Klik hier om meer te leer oor die formaat van die Inkomstestaat.