Introduction to Accounting: List of Main Accounting Items Classified in a
Normal Profit and Loss Account.
Profit and Loss Account
Accounting Items
I.
Revenues
Income from Sales.
The business main
activity (sell its products to its clients).
Other Operating Income: Income from other
activities different that selling its products.
II.
Cost of Sales
All the Cost related to the Sales. (
ex.
If we
sell Coffee, all the cost of the coffee)
A
Revenues
-
Cost of Sales
Gross Margin
III.
Operating Expenses
All the expenses that support the business:
Electricity, Water Supply, Travel, Rent,
Marketing, Communications, Local Taxes
etc..
IV.
Personnel
Expenses
Salaries and Social Security Expenses.
V.
Other Operating
Expenses
Other Expenses not listed before.
V
I
.
Amortization &
Depreciation
The Amortization & depreciation Cost of the
Fixed Assets (Intangible & PPE)
A
-
(III
-
IV
-
V
-
VI) =B
OPERATING RESU
LT
The Operating Results shows the
performance of the Business Main Activity
(Selling its products)
VII
.
Finance Income
The income generated by the financial assets
of the company (Interest Income, etc…)
VIII
.
Finance Expenses
Interest Expenses, Loan Expenses, Bank
commissions, etc….
VII
-
VIII = C
.
FINANCIAL RESULT
The Financial Result sows the results of the
financial activities.
A
-
B
-
C= D
PROFIT BEFORE TAX
Operating Result + Financial Result
25%
Income Tax Expense
Income
TAX
applied to the Business Activities
(in Spain 25%)
D * (1
-
25%)
PROFIT FOR THE PERIOD
Shows the overall result of the Business
Activity.