Income Statement Template

Income Statement Template

What is the best way of making an easy-to understand and easy-to-use income statement? Since it is a formal affair, you can pick out an example of your choice and go along with it.
BusinessZeal Staff
Last Updated: Jun 3, 2018
There is no debating the fact that an income statement is a very important document whether you are a salaried individual or a businessman. And there's always a fixed format to do things like these, as it helps other people understand the report better. Here is a template to simplify the task of preparing an income statement.
Template
An income statement consists of two parts showing revenue and expenses. The first thing you need to do is divide the page vertically into two sections meant for both these parts. Make three columns in each section with headings such as Particulars, Debit ($) and Credit ($). Once done, you can start posting your financial entries. Here is how an income statement should look.
Particulars Amount ($) Total ($)
Revenue
Gross revenue/profit xxx
Rent received xx
Interest received xx
Expenses
Office expenses xx
Administration expenses xx
Rent paid xx
Printing and Stationery xx
Salary xx
Legal expenses xx
Telephone expenses xx
Depreciation xx
Advertising expenses xx
Entertainment expenses xx
Total expenses (xxx)
Net revenue/profit xxx
Facts About Income Statements
  • It is supposed to be a detailed statement about the various incomes and expenses of the business. It is not just mandatory, but it also helps people understand cash flow or where exactly the money is being spent.
  • As previously mentioned, income statements help to understand how money flows in and out of business. This helps to control cost and expenditure, if they are unusually high.
  • It can also help you analyze the incomes and expenses of the business as compared to those of the previous financial year, monitor the progress and correct the decline, if any.
  • An income statement is considered to be an important document for taxation purposes as per Internal Revenue Service (IRS) rules. Since it involves calculations of income tax based on net revenue or profit, the income statement needs to be prepared.
As you can see, the income statement isn't too difficult to prepare. All you have to do is add all the particulars of different accounts under each head and then enter the amounts pertaining to each account. Basically, it should be lucid and easy to update. I hope the template given in this article will simplify your task of preparing the income statement.