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A Level Business Studies - Accounting And Finance > Income Statement > Flashcards

Flashcards in Income Statement Deck (5):
1

Name 2 principles of accounting

1. Consistency
2. Going concern
3. Matching
4. Materiality
5. Objectivity
6. Prudence
7. Realisation

2

What does the income statement show

The income statement shows the income and expenditure over one year

3

What 4 things does the income statement show

1. Revenue from sales
2. Cost of sales
3. Gross profit (cost - revenue)
4. Overheads and expenses (costs not directly involved in production)

4

How do you work out operating profits

Operating profits = gross profit - overheads and expenses

5

How do you work out net profit

Net profit = operating profit - (taxes + interest)