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What You Must Know Income Statement

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What You Must Know Income Statement
What you must know - Session 3- Income Statement

1. Evaluate the nature and importance of profit.

2. Know the format and purpose of the Income Statement and it’s relationship with the Balance Sheet

3. Understand the main measurement issue (“matching”)

4. Be aware of Sales Recognition issues

5. Be able to prepare a simple Income Statement

6. Be aware of the importance of Gross Profit

7. Know the difference between Operating Profit (EBIT) and Net Profit (PAT)

8. Have a basic practical understanding of Accrual Accounting and why it is used.

9. Know the basics of depreciation methods and how it appears in the Income Statement (versus the Balance Sheet)

10. Understand what are non recurring items appearing in the Income Statement.
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