February 25th, 2008
Small Business Finance - How To Understand Income On The Income Statement
An income statement a.k.a. Profit & Loss, is a summary of income received and expenses reported during a stated period. The periods are usually stated in monthly, quarterly, or annual terms.
A mid-month income statement can misrepresent the data. For instance, if your business records most of your sales in the first 7 days of the month but does not record expenses till after the 20th of the month. This mid-month statement will overstate income and understate expenses.
Income can also be called sales or revenue.