Income Statement on Trading Company

             The income statement is part of a company's financial statements were produced in a period or periods accounting book that presents all elements of income and expense that the company will ultimately generate net income conditions or loss which aims to determine the amount of tax to be charged to entrepreneurs, evaluate and check the history of profit each time, check the efficiency of business based on the value of business costs, and help investors and creditors determining past financial performance of the company, predict future performance, and assesses the ability to generate future revenue streams through the reporting of income and expenses. The difference between revenues and expenses is the profit or loss derived by the company. Income statement can be prepared easily with the help of the work sheet or paper work done with quoting nominal account balances such as income and expenses that are in the column of income in the work sheet.
In the income statement, the company’s earnings broadly classified into two categories, namely:  operating revenues (operating income) and revenues outside the business

Expense is reduced the value of assets or increase in liabilities that result in decreases in equity that is not related to the withdrawal of capital and distributions to investors. As well as income, expenses in the income statement are grouped into: operating expenses and expenses outside the business. Operating expenses are expenses related to the principal business activity of the company. Meanwhile, outside of business burden is the burden arising from activities outside the core business of the company, for example interest expense.
The elements of the income statement in trading companies, namely:

·                Net Income is gross income minus operating expenses companies

·                Gross profit (gross profit) is the difference between the net sales price of goods sold (COGS)

·                Net Sales is all sales minus sales returns and allowances

·                 Cost of Goods Sold (COGS) an acquisition cost of goods sold

·                Net purchases are the sum of all purchases plus payload, reduced purchase returns and purchase pieces

·                 Operating Expenses The Company is an all expenses associated with the principal activities of the company

·                Revenues and Expenses outside the business are revenues and expenses are incurred but not directly related to the principal activities of the company