An income statement, also called a profit and loss statement, is a summary of your earnings and expenses at any given point in time. You can generate income statements on a monthly, quarterly or annual basis. Income statements are common for businesses, but you can also track your personal finances by providing you a summary of where your money goes and how much is left.
Create a list electronically or on paper that details all of your sources of income for the reporting period. Your income sources include your salary, any interest payments or other financial gains. If you have a small business, the income list includes your gross revenues, accumulated interest and other income. Add a line at the bottom of the list that shows the total of all of the income. For example, if you have $12,000 to date in salary earnings and $150 in interest, your total income would be $12,150.
Add a second section beneath the income, labeled as the "Expense" category. Include all of the expenses you paid in the reporting period. Personal expenses would be things like your utilities, dining out, clothing, recreation and similar payments. For a small business income statement, your expense category includes business-related expenses such as supplies, maintenance, the cost of goods sold, advertising expenses and any other costs associated with your daily operations.
Create a line at the bottom of the expense category that lists the total of all of the expenses for the period. For example, if you paid $1,000 in advertising, $500 in utilities and $2,300 in equipment maintenance, your expense total would equal $3,800.
Place a line at the bottom of the report labeled "Net Income." Subtract your total expenses from the total income and put the difference on the "Net Income" line. Enter a row at the top of the report that lists the effective date of the report. If you are reporting on all income and expenses up to December 31, list the date accordingly on the top header of the report.
Tara Kimball is a former accounting professional with more than 10 years of experience in corporate finance and small business accounting. She has also worked in desktop support and network management. Her articles have appeared in various online publications.