Accounting principles | business valuation | topics | career center | dictionary | accounting Q & A | quizzes | about us

Popular Accounting Topics

Accounting for Merchandising Activities
Debits and Credits (Double Entry Accounting)
Time Value of Money & Present/Future Values
Complex Debt & Equity Instruments
Common Stock & Shareholder's Equity
Accounting & Finance Ratios
Valuing Common Stock
Corporate Income Taxes
Lower of Cost or Market (LCM) & Inventory Valuation
Chart of Accounts & Bookkeeping
Bonds Payable & Long Term Liabilities
Capital Assets

What category of browser are you on this website?

Income Statement

The financial statement that shows whether the business earned a profit by subtracting expenses from revenues; it lists the types and amounts of revenues earned and expenses incurred by a business over a period of time.

Income Statement of a Merchandising Company

• a major cost to merchandising businesses is the cost of the goods it buys to resell (cost of goods sold).

• this is an expense that is shown separately on the income statement.

Two Key Formulas

Sales - Cost of goods sold = Gross Profit on Sales


Gross Profit on Sales - Expenses = Net Income

>> More Accounting Terms & Glossary?

© Accounting Scholar | Privacy Policy & Disclaimer | Contact Us