Explain Income Statement in Accounting Fundamentals

Managers record data to keep track of financial transactions. This data helps the company make sound financial decisions. It also helps different stakeholders analyse the financial health of the company.

The reporting of this data is primarily done through three financial statements. In the upcoming video, our faculty, Marie-Lys will introduce you to the first fundamental financial statement: the income statement.

In this video, you learnt the following:

• In the long run, a company can generate wealth only by selling its products and services.

• Wealth is the accumulation of profit over a period of time.

• Profit is the difference between the revenue from sales and the costs involved to generate those sales.

• The income statement measures the profit generated by a company over a period of time.

In the next segment, you will learn about another financial statement, which is the cash flow statement.