Unit 21: Income Statements | Baamboozle - Baamboozle

English 11 Public

Income Statements

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Income statement

financial statement of revenue, costs and profits for a given period of time. Usually 1 financial year

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Gross profits

revenue minus the cost of sales

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Profits

the difference between revenue and total costs

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Total costs

costs of sales and expenses

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Revenue

Total money earned by the sale of products

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Costs of sales

the cost of the resources needed to produce the items being sold ~direct costs

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Expenses

day-to-day operating expenses of a business

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Why does the government care about income statements?

Because taxes are calculated depending on profit

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Why do suppliers care about income statements?

Because they want to know if the company will continue to purchase materials and other suppliers.

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Why is it important for private businesses to know how much profit they make?

Measure success, measure the manager's performance, deciding which products to sell

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Why is it important for private businesses to know how much profit they make? (5 reasons)

Measure success / measure the manager's performance / deciding which products to sell / finance business expansion / attract investors

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