Profit and Loss

A standard financial statement also known as the income statement, statement of financial position, or revenues in excess of expenses.

Profit and Loss Statement Using Class Accounting

Class accounting breaks down sales and the associated cost of sales into functional groups.  Whether you use divisions or departments or product/service lines class accounting allows you to identify those more profitable areas of operations.  This is just one of the many different financial reports used in small business. To help you envision class accounting I’m …

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Apartment Complex Profit and Loss Statement – (Revenue Section) Best Presentation Format

In the apartment complex industry I have had the privilege of reviewing four different presentation formats prepared by different Certified Public Accounting Firms.  Interestingly enough, they were all distinctly different.  But one stood out!  It made much more sense than the others.  One of the other three had an interesting subsection and so I combined …

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Cost of Sales – Various Formats

Many business owners misunderstand the use of term ‘Cost of Sales’ by restricting it to just simply ‘Cost of Goods Sold’.  Basically, most business entrepreneurs and even accountants don’t realize that it has several different names and presentation formats.  But it is essentially costs of sales.  Cost of Sales is the generic term used.  However, …

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Profit

Profit refers the earnings from the business operations.  It customarily means the bottom line of the business income statement or its profit and loss statement.  For many business owners, it refers to the amount earned before income taxes are paid.  However, this is not correct.  It really means the amount earned for the owners of …

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Deferred (Unearned) Revenue – Definition and Accounting Procedures

Deferred or unearned revenue is an advance payment made by a customer for a product or service that has not yet been rendered (delivered).  It is a very common economic transaction.  When you book and prepay for your airline ticket, the flight service records this as unearned revenue.  Once you board the plane and land …

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Format of the Profit and Loss Statement for Service Related Businesses

Service related businesses require a different format than the traditional profit and loss statement AKA the income statement.  The traditional profit and loss focuses on sales of products and a corresponding cost of goods sold section to help the reader evaluate the gross margin.  But in service, the owner needs a profit and loss statement …

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