income statement

The income statement (statement of income, statement of earnings, statement of operations, statement of comprehensive income) reports the accountant ’s primary measure of performance of a business , revenues less expenses during the accounting period. The income statement includes three elements:

  • Revenues : the amounts expected to be received for goods or services that have been delivered to a customer, whether the customer has paid for the goods or services.
  • Expenses : the dollar amount of resources the entity used to earn revenues during the period, including income tax expense.
  • Net Income : the excess of total revenues over total expenses.

The income statement equation that describes their relationship is: Revenue - Expenses = Net Incom e.

[Last reviewed in March of 2022 by the Wex Definitions Team ]

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