Many try to avoid studying accounting because they are simply unaware of where and how to begin. Without a doubt, accounting operates under unfamiliar logic and follows different rules. It is inevitable, if one is to learn accounting well, to begin from the building blocks of accounting-financial statements.
There are four main financial statements: balance sheets, income statements, cash flow statements and statements of shareholders' equity. Let us focus on income statements.
An income statement is a report that shows how much a company earned over a specified period. This kind of statement also shows the costs and expenses related with earning that revenue. At the bottom of the statement can be found the company's net earnings or losses. This tells you how much the company gained or lost.
Generally, income statements also reflect report earnings per share, which tells you how much shareholders are slated to receive if the company decided to distribute all of the net earnings for the period specified.
Think of income statements as a set of stairs. At the topmost step is the total amount of sales made during the accounting phase. For each step down, a deduction for certain costs or other operating expenses related with earning the revenue can be made.
At the final step, one will be able to find, the amount that the company actually earned or lost during the accounting period that you specify, that is if efforts to take account of the changes have been actually made.
There are four main financial statements: balance sheets, income statements, cash flow statements and statements of shareholders' equity. Let us focus on income statements.
An income statement is a report that shows how much a company earned over a specified period. This kind of statement also shows the costs and expenses related with earning that revenue. At the bottom of the statement can be found the company's net earnings or losses. This tells you how much the company gained or lost.
Generally, income statements also reflect report earnings per share, which tells you how much shareholders are slated to receive if the company decided to distribute all of the net earnings for the period specified.
Think of income statements as a set of stairs. At the topmost step is the total amount of sales made during the accounting phase. For each step down, a deduction for certain costs or other operating expenses related with earning the revenue can be made.
At the final step, one will be able to find, the amount that the company actually earned or lost during the accounting period that you specify, that is if efforts to take account of the changes have been actually made.
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