Accounting for IGCSE & O level - Final Statements (Section 11 - No. 21)
Which of the following is the correct order to prepare an income statement?
Gross profit, sales, cost of goods sold, operating expenses, and net income
Sales, cost of goods sold, gross profit, operating expenses, and net income
Cost of goods sold, sales, gross profit, operating expenses, and net income
Sales, gross profit, cost of goods sold, operating expenses, and net income
Paskaidrojums
The income statement is prepared by first showing sales, then cost of goods sold, which will calculate gross profit. After gross profit, the operating expenses are considered to calculate the net income.