The Profit and Loss also known as Statement of Income, Statement of Income and

Expenses, or State Performance; is a financial report which demonstrates the

profitability of the company for a certain period, ie, profits and / or losses that the
company obtained or expect to have.

For the more sophisticated development (accounting, making a counter) the 6-7-8-
9 Classes Business Accounting Plan is used:

Class 6: Expenditure
Class 7: Income
Class 8: Closing Accounts
Class 9: Analytical Accounts Operations

Classes are used by accountants because their task in business is "fit" all costs, if
your company is medium or large insurance you already have an accountant, but if
your company is small even do not need to hire one, but if necessary you know the
importance, management and development of this valuable accounting reports.

A profit and loss measures the activity of a company over a period, usually a month,
quarter or year. This financial report may have different names: profit and loss
statement, statement of income, statement of income and expenses or even state
operations. The profit and loss basically tells income, expenses, profits and losses.
Keep in mind that in almost all cases, earnings and cash flow are not the same thing.

The basic formula for the profit and loss account is:

Income - expenses = net income.

Income statements typically have the following format:

Income
- Operating expenses (variables)
= Gross Margin (operating) profit
- Fixed costs
= Operating Income
+/- Other income and expenses (non-operating)
= Income before taxes
- Income taxes
= Net income (after taxes)

STATEMENT OF INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2016

STATEMENT OF INCOME SINGLE STEP

 Income:

Net sales $653,000

Interest income $0

Gain on sale of equipment $0

Total income $653,000

Costs and expenses:

Cost of goods sold $283,000

Selling expenses $142,000

General and administrative expenses $170,000

Interest expense $9,000

Income taxes $10,000

Total costs and expenses $614,000

net income $39,000

Example statement of income multistep

Net sales revenues show total sales for the period of the profit less sales discounts
or returns and allowances and losses. This total should not include added to invoices
for sales tax is required to collect. These increases in turnover are properly
recognized as current liabilities. Returns and bonuses for sales and sales discounts
should be deducted from gross income to arrive at net sales by sales. When the
selling price increases to cover the cost of transport for delivery to the customer and
is charged accordingly, transportation charges paid by the company should also be
subtracted from sales to reach net sales. Transportation charges that were not
transferred to the buyer are recognized as selling expenses.

You can use the following table as a model to create a profit multistep for their
company and loss.
 STATEMENT OF INCOME

FOR THE YEAR ENDED 30 SEPTEMBER 2016

STATEMENT OF INCOME multistep

SPENDING INCOME

sales $660,000

Sales returns and allowances $5,000

Discount sales $2,000 $653,000

Cost of goods sold

Initial inventory $120,000

Purchases $230,000

Transport $10,000

Less ending inventory $77,000 $283,000

Gross profit on sales $370,000

Operating expenses

Selling expenses

Wages sales $29,000

Advertising expenses $70,000

Other selling expenses $43,000 $142,000

General and administrative expenses

Salaries agents $50,000

Office employee salaries $13,000

Payroll taxes $22,000

insurance $44,000

Depreciation $17,000

Expenses several general $4,000 $170,000

operating income $58,000

Other income

Interest income $0

Gain on sale of equipment $0 $0

Other expenses

Interest expense $9,000 $9,000

Income before taxes $49,000

Income taxes $10,000 $10,000

net income $39,000