Income Statement

How do you calculate net profit?

• Revenue - Expenses

• Gross profit - Variable cost

• Revenue - indirect cost

• Gross profit - Revenue

Examples may include salaries, utilities, rent, insurance, and office supplies.

• Revenue

• Net Income

• Expense

• Net Loss

Revenue = 1000

Cost of Goods Sold = 200

Expenses = 300

Net Profit = ?

• 800

• 700

• 300

• 500

Examples may include salaries, utilities, rent, insurance, and office supplies.

• Revenue

• Expense

• Net income

• Net loss

What is the purpose of an income statement?

• calculate the bank balance

• calculate sales

• calculate net assets

• calculate net profit

Which of the following means money spent?

• Revenue

• Expenses

• Net income

• Gross profit

Which of the following means money received?

• Net loss

• Net gain

• Insurance

• Income

When expenses are greater than income?

• Expense

• Net income

• Net loss

• Net gain

If total expenses exceed total revenue, a net loss is reported.

• True

• False

Money spent is an Expense

• True

• False