Depreciation - An expense that is caused by machinery/equipment reducing in value as it ages., Gross Profit - The costs that are involved in producing the goods or services, Profit for the Year - The Profit the business has made at the end of an accounting period., Expenses - The indirect costs which must be paid by the business in an accounting period., Prepayment - Where a portion of expenses have been paid in advance or too much has been paid and needs to be deducted from that expense in the income statement, Cost of Sales - The costs involved directly with buying/selling the product, Sales Revenue - The income made from selling goods/services., Sales Returns - When goods sold are returned to the business. These require a refund and a deduction from the sales revenue figure in the income statement., Accrual - When a business has paid less than it owes. This would be added on to the particular expense in the income statement,

Income Statement Terms

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