Income Statement

An Income Statement records all the revenue your organization earns and the expenses it incurs over a predetermined period of time. By adding all the revenue your organization receives from selling goods or services and then subtracting the total cost of operating your organization, the income statement shows net profit, which can be expressed as:

Revenue - Expenses = Net Profit

Sample Income Statement

The income statement should cover a period that makes the most sense for your organization. The fund balance, which is reported at the bottom of the balance sheet, allows an organization to sustain its current services, survive in periods of low cash flow, and reinvest money in the organization for important new activities and projects.

Simply put, the Income tells you where your money goes once it comes into the organization. Any money left over at the end of the reporting period goes into the fund balance (also known as “equity” on the Balance Sheet).