It works its way down to the ending profit or loss. Let's look at a sample income statement to better illustrate the format. In the example above, Company A has generated $1 million in product ...

but allocates a capital expenditure as an expense over time. Under GAAP and the accrual basis of accounting, you must account for an expense in the period in which it was incurred. The period in ...

The sum of income less all costs and expenses is the net income. When spending exceeds the budgeted revenue, it causes a revenue deficit. Net income takes into account the price tags for ...