1. Basic concepts

Cost of goods sold, and Delivery expense profit and loss accounts. Accountants use the Income

statement to see whether a company is profitable. The income statement is sometimes referred to as the profit and loss statement (P&L).

The income statement is important because it shows the profitability of a company during the time interval specified in its heading. The period of time that the statement covers is chosen by the business and will vary (for the month, quarter, year). Keep in mind that the income statement shows revenues, expenses, gains, and losses; it does not show cash receipts (money you receive) nor cash disbursements (money you pay out).

People pay attention to the profitability of a company for many reasons. For example, if a company was not able to operate profitably—the bottom line of the income statement indicates a net loss—a banker/lender/creditor may be hesitant to extend additional credit to the company. On the other hand, a company that has operated profitably—the bottom line of the income statement indicates a net income—demonstrated its ability to use borrowed and invested funds in a successful manner. A

company’s ability to operate profitably is important to current lenders and investors, potential lenders and investors, company management, competitors, government agencies, labor unions, and others. Profit and loss contains the following elements: Revenues and Gains, and Expenses and Losses.

Note that we prompt about the revenue when a product has been sold, regardless of when the money is actually received. But the Customer could not pay for our pizza for some reason. Similarly, the

expenses reported on the income statement might not have been paid. You could review the balance sheet changes to determine the facts, but the Cash flow statement has already integrated all that

information. As a result, savvy business people and investors utilize this important financial statement. We don’t analyze this statement.

The Balance sheet, Income statement, and Cash flow statement are the major financial statements used by accountants and business owners.

To know more about a Financial statement, I recommend you these articles: , , .

In Microsoft Dynamics AX, all statements are set up manually. The user defines the rows, columns, ranges etc. Our already contains the setup for Balance sheet, Income statement, and Cash flow statement.

To view the statement, do the following:

1. Click General ledger > Reports > Transactions > Periodic > Financial statement. The

Financial statementform opens.