Income statement determines the company's financial performance over a specific accounting period. Financial status is assessed by giving a summary of how the business generates its revenues and expenses through both operating and non-operating activities.
It also shows the net profit or loss generated over a particular accounting period, typically over a given quarter or year. The income statement is also known as the "profit and loss statement" or "statement of revenue and expense."
The income statement is divided into two major parts which are:
• The operating items section and
• The non-operating items section.