Income Statement – Revenue, Other Income, Expenses

The income statement communicates how much revenue and other income the company generated during a period and the expenses it incurred to generate that revenue and other income.

Revenue typically refers to amounts charged for the delivery of goods or services in the ordinaryactivities of a business.

Other income includes gains, which may or may not arise in the ordinary activities of the business.

Expenses reflect outflows, depletions of assets, and incurrences of liabilities that decrease equity. Expenses typically include such items as cost of sales (cost of goods sold), administrative expenses, and income tax expenses and may be defined to include losses.

Net income is revenue plus other income minus expenses.

Net income may also be referred to as “net earnings,” “net profit,” and “profit or loss.” In the event that expenses exceed revenues and other income, the result is referred to as “netloss.”

The income statement is sometimes referred to as a statement of operations or profit and loss(P&L) statement.

Revenue + Other income – Expenses

= Income – Expenses

= Net income