Which Accounts Are Found On An Income Statement?

The accounts in the general ledger that are used for a company’s profit and loss statement are referred to as income statements. After the accounts are used for the preparation of the balance sheet, these accounts are usually placed in the general ledger. In order to track the revenue and costs associated with its various product lines, departments, or divisions, a larger organization may have hundreds or even thousands of income statement accounts.

Our attorneys practicing corporate or business laws assist businesses with issues concerning income statements. We can help resolve issues concerning legality in financial transactions, regulations concerning financial moneys, and consultations on legal aspects of accounting and financial reports.

Accounts Found in Income Statements

Revenue
- Companies record revenue from product and service sales in an account found on an income statement.
- Specific accounts may exist for tracking sales by product, region, or classification.
Sales Discounts
- The sales discounts account, a contra account, reduces the gross sale price for customer discounts.
- This account found on an income statement reflects the impact of discounts on sales revenue.
The Price of the Goods Sold
- This account details the cost of goods or products sold during a specific period.
- An account found on an income statement may divide this cost into raw materials, labor, and overheads.
Compensation Expense
- This account shows all salary, wages, bonuses, commissions, and severance pay for employees.
- It represents a significant expense account found on an income statement.
Benefits for Employees
- Accounts for employer-paid benefits like life and health insurance, and pension plan contributions.
- This account found on an income statement reflects the company’s investment in employee welfare.
Cost of Insurance
- Details the company’s expenditure on various insurance types, including liability and construction.
- An account found on an income statement that indicates the company’s insurance-related outlays.
Marketing Costs
- Encompasses expenses on publications, brochures, and advertising efforts.
- This marketing account found on an income statement measures promotional spending.
Cost of Office Supplies
- Tracks incidental supply expenses not related to manufacturing processes.
- An account found on an income statement that records small yet essential office expenditures.
Taxes on Payroll
- This account includes employer-paid components like social security taxes.
- A crucial financial obligation account found on an income statement.
Costs for Professionals
- Reflects fees paid to consultants, lawyers, and auditors by the company.
- An account found on an income statement that details professional service expenses.
Rental Expense
- Records monthly payments for leased land and facilities.
- This rental expense account found on an income statement shows the cost of leased properties.
Expenses for Upkeep and Repairs
- Covers maintenance and repair costs unrelated to operations.
- An account found on an income statement, reflecting the company’s investment in asset maintenance.
Taxes
- Includes use, property taxes, and other local government levies.
- An account found on an income statement, tracking various tax obligations.
Expense for Entertainment and Travel
- Accounts for travel costs, lodging, mileage reimbursement, and similar expenses.
- This account found on an income statement details staff travel and entertainment expenses.
Cost of Utilities
- Encompasses expenses for gas, electricity, phone services, and more.
- A utility expense account found on an income statement reflects operational overheads.
Taxes on Income
- Records the entity’s income tax obligations.
- An account found on an income statement that shows the tax burden on company profits.

A company operating in a specialized sector can need more accounts than those mentioned here. On the other hand, they might discover that some accounts an income statement are useless. Therefore, each company will employ a different set of income statement accounts.

Most recent blogs:

How To Write An LLC Article of Organization

How To Name An LLC

A comprehensive guide on how to name an LLC.

How To Create An LLC

Strategic Role of America’s National Debt: Benefits and Misconceptions

This article explores the complex role of America's national debt, highlighting its strategic benefits to the economy and addressing common misconceptions about its impact. It emphasizes the necessity and functionality of debt in managing economic stability and growth, while dispelling fears related to government financial management.

5 Businesses That Have the Highest Success Rate for Profits

Top 5 business most likely to succeed and profits backed up by data.

Types of Businesses That Often Fails

Many entrepreneurs, about two-thirds, never start their businesses due to fear of failure. This article will highlight businesses with both high and low failure rates, guiding you toward a more promising venture.

What is NAICS code for small business

NAICS codes determine if your company qualifies as a small business for federal contracts, based on specific size standards. The SBA uses these codes for statistical analysis and opportunity identification, essential for GSA contractors.

Do you need a business license to sell on Shopify

Selling on Shopify often doesn't require a business license, but there are exceptions based on earnings, regulated inventory, and specific product types. Understanding tax obligations, including sales tax and nexus, is crucial for Shopify sellers, regardless of business structure.

Do you need a license to start a business

Obtain the necessary licenses for your business in California, ensuring compliance with state, local, and possibly federal regulations. Simplify the process with guidance on where and how to apply, tailoring to your business needs and location.

How to get a seller’s permit in California

Gain the ability to sell in California with a crucial seller's permit, applicable to many businesses. Secure your permit easily through the CDTFA, with no cost for application, enhancing your operational compliance.

Transfer LLC to another state

Navigate the complexities of moving your LLC to another state with insights on dissolution, domestication, and foreign registration. Ensure a smooth transition by understanding the tax, legal, and procedural implications.

Articles of organization vs Operating agreement

Navigate the essentials of starting an LLC with our breakdown of Articles of Organization versus operating agreements. Understand the necessity, benefits, and filing process for both to ensure your business's legal foundation.

Anonymous LLC States

Unlock the benefits of privacy and asset protection with an anonymous LLC in states like Wyoming, Delaware, Nevada, and New Mexico. Ensure your business advantages while maintaining owner anonymity and confidentiality.

LLC Tax Deductions

Maximize your LLC's tax benefits with our guide on essential tax deductions. From home office expenses to vehicle costs, ensure you're not missing out on valuable savings.

SS4 instructions: Simple step by step

Get your EIN by completing IRS Form SS-4 with our simple guide, highlighting the importance and steps for business tax purposes. Avoid common pitfalls and ensure accuracy in your application process for smoother IRS filings.

What should I name my LLC

Learn how to choose the perfect LLC name that meets legal requirements and resonates with your brand in our step-by-step guide. Discover tips for brainstorming, checking availability, and securing your LLC name.

How to start a freelance business

Learn how to overcome initial doubts and launch a successful freelance business with steps from goal setting to client acquisition. Discover strategies for selecting profitable niches, branding, and pricing to kickstart your freelance career.

Start a Business with $5000

Discover how to start your own business with just $5,000, turning your tax refund or small savings into a long-term investment. Explore viable startup ideas from online tutoring to real estate entrepreneurship within a budget.

Sue for breach of contract

Understand the legal standing of both written and oral contracts, including the ability to sue for breach. Learn the significance of documentation and the challenges of proving verbal agreements in court.

Owning a store checklist for business owner

Discover the essential checklist for aspiring retail store owners, focusing on meticulous planning and relationship building over mere sales. Learn the crucial aspects of POS systems, hiring, marketing, and financial metrics for a successful start.

Types of Businessman

Explore the diverse world of entrepreneurship and the vital skills needed to thrive as a businessman in 2024, including understanding different entrepreneur types. Learn how to navigate the entrepreneurial journey, from digital ventures to lifestyle businesses, and transform from a wantrepreneur to a successful entrepreneur.