Net income results when revenues exceed expenses. A net loss occurs when expenses exceed revenues.
More from this Section
- Accounts receivable
Accounts receivable are amounts owed by customers on account. They result from the sale of goods and services. Companies generally expect...
- Other expenses and losses
A non operating activities section of the income statement that shows expense from auxiliary operations and losses unrelated to the company’s operations.
- Period costs
Period costs are costs that are matched with the revenue of a specific time period rather than included as part of the cost of a salable product.
- Long-term investments
Long-term investments are generally investments stocks and bonds of other companies that are normally held for many years. This category also includes investments...
- Debit memorandum
Some banks charge a monthly fee for their services. Often they charge this fee only when the average monthly balance in a checking account falls below a specified amount.
- Interim periods & Fiscal year
Accounting time periods are generally a month, a quarter, or a year. Monthly and quarterly time periods are called interim periods. An accounting time period that is one year in length...
- Direct method
Direct method is a method of determining net cash provided by operating activities by adjusting each item in the income statement from the accrual basis to the cash basis.