An income statement is also known as what?

An income statement is commonly referred to as a profit and loss statement. This document provides a summary of the revenues, costs, and expenses incurred during a specified period, usually a fiscal quarter or year. The primary purpose of the income statement is to show the profitability of a business, detailing how much money was earned (revenues) versus how much was spent (expenses), resulting in either a net profit or a net loss.

Understanding this terminology is vital for contractors and business owners because analyzing the income statement helps in assessing financial performance and making informed decisions regarding budgeting, forecasting, and strategic planning. Other terms like balance sheet, cash flow statement, and revenue statement serve different purposes in financial reporting and do not fully encapsulate the income statement’s focus on profit and loss over a designated period.