About Lesson
Income Statement:
- It is the summary of farm’s profit and loss over a specific period of time, usually for a year or a part of a year.
- It shows cost and expenses associated with the earning of revenue. It is also known as profit and loss statement.
- The top lone is referred to as gross revenue or sales. It is called gross because expenses have not been deducted from it.
- Net revenue is the bottom line which comes after deduction of all kinds of expenses.
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Debit |
Credit |
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1. Operating expenses Seeds Fertilizers Feed labour SUBTOTAL: 2. Fixed expenses Payment of interest 3. Purchase of durable assets a. Livestock b. Equipments SUBTOTAL: A. Total cash expense 2. Decrease in inventory Depreciation B. Total Debts |
3. Crop sales a. Wheat b. Rice c. Others 4. Livestock Product sales: a. Milk b. Manure 5. Livestock sales SUBTOTAL: 6. Miscellaneous Receipts a. Machinery hiring b. Sales of machinery C. Total Cash receipts 7. Products used at home 8. Increase in inventories a. Liquid assets b. Value of livestock SUBTOTAL D. Total Credits |
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Net cash income= A-C Net farm Income = B-D |
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