Friday, July 12th, 2024
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Income Statement

Having an accurate income statement is a vital part of the bookkeeping process because it offers you an idea of where your business stands financially.

An income statement, otherwise known as a profit and loss statement, examines your revenues against your expenses to provide you with a financial profit or loss statement.

An accurate income statement can also help you with the following needs:

  • Track revenues and expenses to determine the financial operating performance of your business
  • Determine where your business is over or under budget     
  • Identify specific items that are causing unexpected expenditures such as phone, fax, mail, or supply expenses     
  • Track dramatic increases in product returns or cost of goods sold as a percentage of sales
  • Determine your income tax liability

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