Definition:
Income Statement
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An income statement is an accounting of sales, expenses, and net profit or net income for a given period.An income statement itemizes the revenues and expenses of the past that led to the current profit or loss of the company.
In contrast to a balance sheet — which is a snapshot taken at a certain time — an income statement reflects changes in financial position over a period of time such as a month, quarter or year.
An income statement is based on a fundamental accounting equation (Income = Revenue - Expenses) and shows the rate at which the owners equity is changing.
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