What is a profit and loss statement?

What is a profit and loss statement?

One thing for anyone who deals with accounting must know is the profit and loss statement, but for the general public, if they see the word The profit and loss statement would probably be quite confusing as to what exactly it is. As follows, let's get to know each other in this article.

Income Statement or Income Statement is what is used to refer to transactions. Or a statement used to tell the operation during a certain period of the business. Depending on how long the business will be, such as 6 months or 1 year, the income statement will be able to tell whether the business has profit or loss by comparing the amount of income and expenses.

What does the income statement contain?

1. Income

is the result of selling products or services of that business derived from the calculation of the exact amount and also includes income derived from investments, bartering of goods, loan interest as well.

The income can be divided into 2 types as follows.

- Direct income = comes from the direct operation of the business, such as the sale of goods or services.

- Other income = the part other than direct income

2. Expenses

It is the cost of goods/services that the business pays to generate income.

3. Net Profit/Net Loss

is to look between expenses and income

More income than expenses = net profit

More expenses than income = net loss

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