chapter  4
31 Pages

– The income statement

Introduction When an individual sets up in business they generally do so to make a profi t. Consequently, the owner needs to know how to make sure the business is actually making a profi t and how much profi t it is making. This is done formally in a fi nancial statement called an income statement. Income statements are usually prepared for a period covering a year, coinciding with the annual accounting date, but they can be prepared for any length of time.