What is a Income Statement ?

The income statement is the profit and loss statement of a business. It shows the performance of a business over a period of time such as a month or quarter or year. The income statement is preferable prepared in comparitive form to show changes from the preceeding year. Extraordinary gains and losses of material amount should be shown seperately. Also for public companies earnings per share should be presented on the income statement. The basic accounting formula is Sales Revenues minus Expenses = Income or Loss.