income list

It is a table that reviews the short and simplified results of the single-step accounts, and sometimes it is multiple steps, and this list is comprehensive for the accounts of all the work of an organization during a certain period of time, and depends in its composition on revenues and expenses, to reveal the net profit or loss achieved by the facility .

In its composition, the income statement depends on a comparison between the revenues that the facility has achieved, and the expenses and burdens it has provided, and thus ultimately the fate of the facility is revealed with the profit or loss it achieved; The profit is realized if the value of the revenue exceeds the value of the expenditure, and the loss is realized if the value of the expenditure exceeds the revenue.

Income Statement Forms

  • The one-step income statement, and this type is characterized by its simplicity, and its elements are divided into two main parts, namely:
  • Income statement with multiple steps. As for this type, it is characterized by providing detailed data about the elements of income and expenses, and it depends mainly on the principle of separating operating revenues and expenses, and other revenues and expenses, in addition to separating profits and losses from projects, whether they are suspended or continuing, It is distinguished by providing figures of interest to the user of the financial statement, such as: the gross profit figure, taxes on operating profits, operating profits, and net profits.
  • Revenues, under which all types of revenue are included from operating revenue or others, in the end, to determine the total revenue figure.
  • Expenses, which include all costs paid by the facility, whether they are the cost of goods sold, operating expenses, or imposed taxes, so that the total value of the expenses is determined, and the order of the facility is deducted from profit or loss after subtracting expenses from revenues and arriving at net income.

Statement of financial position

Also known as a balance sheet; It is noteworthy that this designation is more correct given that the statement of financial position does not provide the accountant with any information about the liquidity situation in the organization, and it is only a financial report or a photograph that reveals the true balances of interest to the decision makers and their makers in the facility; But it has absolutely nothing to do with revealing the strength and weakness of the facility.

The difference between the income statement and the statement of financial position

It is worth noting that the difference between the income statement and the financial position is clear; This is represented in terms of the principle of its composition; The income statement is created to reveal the results related to an ending financial period for an organization, and it shows all revenues, expenses, profits, losses, earnings per share, and others. As for the statement of financial position, its role is limited to revealing the resources owned by the enterprise, and the resulting obligations towards the rest of the organization. Resources at the end of the financial period, in addition to assets, whether cash or other, and all that the establishment owns of supplier accounts, loans and facilities.

The difference between the income statement and the statement of financial position

writing – on the date : – Last updated: 2022-06-18 04:48:01