Understanding profit and loss statements
In this section, we will show you how to customize and generate a profit and loss statement. The profit and loss statement, also referred to as the income statement, or statement of activities in the non-profit sector, shows you how profitable a business is over a period of time. This report summarizes all the income accrued and expenses incurred by a business over a specific period of time. The difference between income and expenses is shown on the report as either net profit (when income exceeds expenses) or net loss (when expenses exceed income). Like most reports, you can customize the profit and loss statement to meet your business needs.
Pro Tip: Before preparing any reports it is important to confirm that your books are reconciled for the reporting period.
Follow these steps to generate and customize a profit and loss statement:
- Navigate to Reports in the left menu bar, as shown in Figure 11.1:
