Income Statement
An Income Statement, also known as a Profit and Loss Statement, is a financial document that summarizes a business's revenues and expenses over a specified period. It provides an overview of the company's ability to generate profit by increasing revenue, reducing costs, or both. The statement follows the accrual basis of accounting, which means it records revenues when they are earned, regardless of when cash is received, and expenses when they are incurred, irrespective of when cash is paid. This approach aligns with Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS), ensuring consistency and comparability across financial statements. Income Statement is a critical tool for stakeholders, including investors, creditors, and management, to assess the financial health and performance of a business.