The income statement is a report that is part of a financial report that contains information about the results of the company's operations, both income and expenses for a certain period.
its existence This profit and loss report is quite important, because this report can be used as a tool to predict future cash flows, many users of financial statements who use this income statement to predict future cash flows, such as investors and creditors. investors and creditors need to predict the company's future cash flows before they inject their funds into the company, of course investors and creditors do not want to inject funds into companies that they value cash flow or poor performance and carry too much risk. when the company experiences a consistent increase in income, although not significant but consistent from year to year, it can be used as a reference by investors and creditors to find out the condition of the company.
The profit / loss calculation report needs to be arranged systematically and logically. In compiling the company's profit / loss the basis is:
Income / Revenue / Sales
That is the flow of cash receipts or other assets received as a result of the sale of goods / services.
Cost
That is the cost of goods sold and other expenses in order to earn income.
Profit and loss
namely the difference between the income received by the company and the costs incurred. If the income is large, the company will make a profit.
Form of Income Statement
1. Single Step
Where is the preparation of profit and loss by taking the total group of accounts in the income statement
2. Multiple Step
That is by classifying estimates of profit and loss according to the part reported in full.
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