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 the best attributes of both. 

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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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Cost Drivers in Small Business

Cost Drivers in Business

The textbook answer defines cost drivers as those factors that determine the overall cost of operations.  As an example, in manufacturing the cost drivers may be processing time or number of steps to produce the product.  In service, the cost drivers could be the actual ratio of billable to non-billable time.  Or it may simply...

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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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Format of the Profit and Loss Statement for Service Related Businesses

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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