What is an 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 comparative form to show changes from the preceding year. Extraordinary gains and losses of material amount should be shown separately. 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.