- Trending Categories
Data Structure
Networking
RDBMS
Operating System
Java
iOS
HTML
CSS
Android
Python
C Programming
C++
C#
MongoDB
MySQL
Javascript
PHP
- Selected Reading
- UPSC IAS Exams Notes
- Developer's Best Practices
- Questions and Answers
- Effective Resume Writing
- HR Interview Questions
- Computer Glossary
- Who is Who
Explain about single step income statement in accounting with example.
Single step income statements represent company’s revenues, expenses and income in simple way. It is easy to calculate as not many steps are involved. Small companies, sole proprietorships uses this kind of statements often.
Formula
Net income = revenues – expenses
Advantages are given below −
- Firm prepares sing step income statement to analyse departmental performance in a period.
- Easy to prepare.
- Easy to analyse.
- Use for internal purpose.
Limitations are explained below −
- Chances of deviation of net income.
- Actual expenses are not known.
- Doesn’t calculate gross profit.
Example
The example is given below −
| Income statement of XYZ company As on 31st March xxxx | |
|---|---|
| Revenue and gains (A) | Rs. |
| Sales revenue | 150000 |
| Interest revenue | 25000 |
| Gain on sales of assets | 13000 |
| Total | 188000 |
| Expenses and losses | |
| Cost of goods sold | 80000 |
| Commissions expenses | 3000 |
| Office supplies expenses | 2500 |
| Office equipment expenses | 2000 |
| Advertising expenses | 2200 |
| Interest expenses | 800 |
| Loss from lawsuit | 1700 |
| Total (B) | 92200 |
| Net income | 95800 |
Net income = (revenue and gains) – (expenses and losses)
= 188000 – 92200
= 188000 – 92200
Published on 13-Aug-2020 10:41:27
- Related Questions & Answers
- Explain about income statement in accounting.
- Explain about balance sheet in accounting.
- Explain about straight line depreciation in accounting.
- Explain about 2NF with an example in DBMS
- Explain about Double-declining balance method in accounting.
- Explain about types of accounting and its golden rules.
- Explain about logical not(!) operator in detail with example in javascript?
- Describe about systems of accounting.
- Explain accounting period in finance and accounting.
- Describe about net income approach in capital structure.
- Explain cash based accounting.
- How can I get the information about a particular column of a table by MySQL EXPLAIN statement? EXPLAIN statement?
- Explain a Step Definition in SpecFlow.
- Running 8085 program in single-step mode
- Explain trial balance with an example
Advertisements