The cost of goods sold (COGS) is any direct cost related to the production of goods that are sold or the cost of inventory you acquire to sell to consumers. In other words, after deducting all the expenses and taxes from the revenue earned during the period, remaining is the net income from the business operation. Here, the net income is nothing but an excess of revenue over the expenses. All these expenses form part of the income statement as they are incurred in relation to such revenues. In the process of rendering services, the company will incur various expenses such as promotional expense (advertisement expenses), sales managers’ salaries, depreciation on the usage of fixed assets and other administrative expenses to earn revenue by rendering services. ExpensesĮxpenses are the amounts incurred to generate revenue and includes the cost of rendering services such as operating expenses, interest payments, rent, salaries and wages, taxes etc.įor example, Max associates is a law firm providing legal consultancy services to its clients. However, there are also other forms of revenue such as interest income, royalty income, rental income etc. So here fee is the revenue forming part of Income Statement. Here, they are engaged in the business of rendering services for which it charges a fee. Max associates is a law firm rendering consultancy services to its clients. This implies that Company A is in the sales business and its revenue is from the sale of computers and mobile phones. And net Revenue means all proceeds from the sale of goods and services excluding the returns.įor example, Zen Phones, an electronic store selling phones and computers. Revenues are the amounts from the sale of goods and services in the normal course of business. While the objective remains the same, owing to the difference in the nature of the business, few components are different in the income statement. Income Statement is also called by different names as “statement of operations” or “statement of earnings” or “ profit and loss statement”.Ī business engaged in services usually prepares an income statement instead of profit & loss a/c. It communicates to users how much revenue the company has generated during the period and the cost incurred by it in connection to generating such revenues. The income statement presents information on the financial results of a company’s business activities over a period of time.
If there are any issues in the company data, it is recommended that you repair the data before migrating. Tally Prime|Migrate Company DataĪfter migration is complete, your company data is re ady to be used in TallyPrime. If you want to alter the backup path and data location before migrating, then press C (Configure).