How To Read A Profit & Loss Statement
Introduction
1. The Income Statement—An Introduction
- What is a Profit and Loss Statement?
- Importance of Income Statement
2. Accounting Principles
- Accounting Period
- Realization Principle
- Accrual Principle
- Matching Principle
- Assets that Become Expenses
3. Measurement of Income
- Revenue
- Expenses
- Classification
- Different Accounting Period Items
4. Preparation of Income Statement
- Account
- Various Types of Profit
- Form and Contents of Profit and Loss Account
· Non-Operating Income/Other Income
Similar to the earlier edition, various intriguing portions have been dealt with through amusing conversations infused with witty answers relating to P&L Statement. Additionally, the new edition elaborates on certain other equally important sections of the P&L Statement that were not addressed in such detail earlier.
This edition answers questions such as:
Ø Why is it important to maintain a P&L Statement?
Ø What items do we need to consider while preparing this statement and why?
Ø What perspective do investors have while analyzing a P&L Statement?
Ø Presented in simple language through some short story like examples to set the stage and tone for
Ø Theoretical discussions, this edition also includes ample exercises along with answer keys.