💰 Financial Statements (Intro)

📘 Income Statement

📖 Lesson Introduction

An Income Statement is a financial report that shows how much money a business earns and spends over a period of time. It helps business owners understand if they made a profit or a loss.

The Income Statement is sometimes called a “Profit and Loss Statement” because it shows:

Revenue (Money Earned)
Expenses (Money Spent)
Net Income or Profit (Money Left Over)

🧾 Basic Parts of an Income Statement

1. Revenue 💵

Money the business earns from selling products or services.

Example:

A burger shop earns ₱10,000 from sales.

2. Expenses 💸

Money the business spends to operate.

Examples:

Rent
Salaries
Utilities
Supplies

🗣️ Questions (1–5)

What is an Income Statement?
What are revenues?
Give two examples of business expenses.
What is net income?
If a business earns ₱15,000 and spends ₱11,000, how much is the net income?

3. Net Income 📈

The profit after subtracting expenses from revenue.

Formula:

Net Income=Revenue−Expenses\text{Net Income} = \text{Revenue} - \text{Expenses}Net Income=Revenue−Expenses

Example:

Revenue = ₱10,000
Expenses = ₱7,000
Net Income = ₱3,000