What is a profit and loss statement?

The income statement is an example of an accounting document that is designed to provide a quick picture of the financial situation of the company. The document, which is sometimes known as a profit and loss statement, provides data on profits generated by trade within a given time frame and also notices any expenses or losses that occur in the same period. Almost all businesses generate a profit and loss statement annually in preparation for the tax season. In addition, many companies also prepare statements quarterly for internal monitoring purposes. In this sense, the profit and loss statement to some extent works in the same way as the balance sheet, because it corresponds to the inflow of money into the organization and the Making note of any outflow of resources as a result of different factors. Bottom line the statement shows whether a net profit has been achieved for the opening and Council data.

Although they existStandard accounting procedures used to define each element included in the profit and loss statement, documents are generally considered to be the purpose of obtaining a wide image of the company's financial stability. A statement of profit and loss should therefore be considered an overview, but not as a detailed description of the transactions that occurred during the quoted period. More detailed information would be achieved from source documents used to determine the data contained in the declaration of profit and loss.

The calculations of the statement and losses can reflect a wide view, but the document is still very useful for both internal and external purposes. Investors can search a statement and have a good idea if their investment is going well. Managers and managers can read through a profit and loss statement and sometimes identify areas where there is room for improvement in one or more company functions. At least the lower limit of the statement of helping the parties to the parties to know when it seems to be a clean zisto reduce or grow in previous periods.