What does income statement mean on the CPA exam?
Income statement. The statement of what was earned and spent over a period, ending in net income. A period statement, unlike the balance sheet, which is a snapshot at one date.
Defined against ASC 220-10-45.
Which CPA exam sections use income statement?
Income statement appears in 6 CPA exam sections: AUD, BAR, FAR, ISC, REG, TCP.
Other terms defined against ASC 220-10
- net income: What is left after every revenue and expense of the period, including tax and discontinued operations.
- net of tax: Stated after the tax effect has been taken out.
- other comprehensive income: Gains and losses that bypass net income and sit in equity until realized, such as unrealized gains on available-for-sale debt securities and foreign currency translation.
Other names for income statement
statement of operations
Related terms
- financial statements: The formal set an entity publishes: balance sheet, income statement, statement of cash flows, statement of changes in equity, and the notes.
- balance sheet: A snapshot at one date of what the entity owns, what it owes, and the owners' residual.
- additional paid-in capital: Amounts received from shareholders above the par or stated value of the shares issued, reported as a separate equity caption.
- statement of cash flows: The statement that explains the change in cash by sorting it into operating, investing and financing activity.
- subsequent event: Something that happens between the balance sheet date and the date the statements are issued.
- Type 1 subsequent event: A recognized subsequent event: it gives evidence about a condition that already existed at the balance sheet date, so the statements are adjusted.