Dictionary / Income Statement
What does Income Statement mean in accounting?
Quick definition
Financial reportingA summary of the revenues and expenses of an accounting unit, or group of such units, for a specified period. This term guides how bookkeepers record, classify, and explain related transactions in routine financial reporting.
Read more below
Examples
June's dated Profit and Loss
You run an upholstery shop. On July 6 you close June and, in QuickBooks Online, open Reports, Profit and Loss, and set the dates to June 1 through June 30. The report shows $14,280 of shop sales, including $2,960 billed to an inn on June 14 for dining chairs, and $1,140 of foam and fabric from a fabric supplier. That dated summary of revenues and expenses is the income statement for June; income is the inflow on those jobs, and Upholstery sales is one income account. Check the date range before you treat the bottom line as the month.
A balance sheet is not the P&L they asked for
You run a pet grooming shop. On October 9, the bank emails that they need last quarter's income statement for a van loan file. You attach the September 30 balance sheet ($8,420 checking, $6,100 van, $2,300 payable to a pet supply vendor) and a September checking PDF. Those papers show what you owned and owed on one date, plus bank activity; they do not summarize revenues and expenses for July 1 through September 30. In Xero, print Profit and Loss for that range and send that, and keep the financial statement package for when they ask for the full set.
Why it matters
An income statement is the P&L for a period: a summary of revenues and expenses for one accounting period. You will print it after most closes if you review the books, and again whenever a lender, CPA, or buyer asks how a month, quarter, or year performed. Send a balance sheet or a bank statement and they see what you owned or what moved in checking, not the period's sales and costs. Income is the inflow, an income account is one ledger line, and a financial statement is the whole package, so set the dates and read sales, expenses, and the bottom line before you decide whether that period made money.
Further reading
Compare this term with reference material from other accounting and finance websites.
Keep learning
Start with the bookkeeping basics, then compare software when you are ready to pick a tool.
Getting startedBookkeeping basics for small-business ownersWhat bookkeeping is, the records you need, double-entry in plain English, and a monthly rhythm that fits a 1–50 person shop.Updated October 4, 2026
RolesWhat does a bookkeeper do?A bookkeeper records bills, invoices, and bank activity so your books stay current. See the weekly work, the month-end close, and what they do not do.Updated August 18, 2026
Monthly closeMonthly bookkeeping: what to close each monthMonth-end is the job: reconcile banks and cards, age bills and invoices, check payroll, then read the reports. A close checklist for small-business owners.Updated August 18, 2026
Startup BankingThe 5 Best Banks for EU StartupsThe 5 best banks for EU startups, ranked: Wise Business, Revolut, Qonto, bunq, and Finom compared on fees, deposit protection, and honest tradeoffs.Updated August 9, 2026Frequently asked questions
What is Income Statement in bookkeeping?
A summary of the revenues and expenses of an accounting unit, or group of such units, for a specified period.
When should I use Income Statement?
Use Income Statement when the transaction facts match its definition and you need the ledger and financial statements to reflect the correct account and period.
What is a common mistake with Income Statement?
Income Statement is used for income statement entries, while Imprest Cash Fund covers a related but distinct bookkeeping purpose. Review both terms before posting unusual transactions. A common mistake is applying it by label only instead of checking the underlying transaction details.