Income Statement Format Of Service Company

The income statement can either be prepared in report format or account format.

Income statement format of service company. Let us name the company strauss printing services all amounts are assumed and simplified for illustration purposes. Therefore the income statement will be a basic breakdown of income and expenses. Tag archives for service company income statement income statements for service companies. Illustration 4 2 income statement boc hong company income statement for the year ended.

Introduction by kristin 1 comment service companies have the most basic income statement of all the types of companies. Since service based companies do not sell a product the income statement will not contain cost of goods sold. The income statement also called the profit and loss statement is a report that shows the income expenses and resulting profits or losses of a company during a specific time period. Since service based companies do not sell a product the income statement will not contain cost of goods sold.

It is an essential tool when looking to define the company s sales its direct costs its indirect costs in addition to its gross profit and net profit. The statement covers the company s financial performance for a given period a month quarter or even year. Income statement format layout. Income statements show how much profit a business generated during a specific reporting period and the amount of expenses incurred while earning revenue.

The income statement format above is a basic one what is known as a single step income statement meaning just one category of income and one category of expenses and prepared specifically for a service business. This statement is a condensed version of the more detailed income statement presented in illustration 4 2. The income statement also called a profit and loss statement is one of the major financial statements issued by businesses along with the balance sheet and cash flow statement. While income statements vary widely in appearance the overall format remains the same.

Like all businesses one of the main financial statements a service company will prepare is the income statement. Here is a sample income statement of a service type sole proprietorship business. Service companies have the most basic income statement of all the types of companies. For example consider the income statement shown in illustration 4 3 for boc hong company.

Examples of service businesses are medical accounting or legal practices or a business that provides services such as plumbing cleaning consulting design etc. Then subtract all operating expenses. Remember the income statement can be used to track the service business s financial performance for a given month quarter or year.