What is sales income statement
When you purchase an item and sell it then usually you should earn money. All shop should earn money from selling items and report of this money will call sales income statement. some other term like invoice income, selling income, … maybe you listen but official name of this type of report is: Sales Income Statement
Importance of sales income statement
This report is the most wanted report in any business because more income from sales will save the business and will cause the business grow up more and more. you could not find any owner that doesn’t like to have a good income from sales section of her/his business.
Calculate of sales income statement
To access this report there are some ways like:
FIFO and LIFO will use for items that have unique serial no and any items maybe have a unique price of purchase and sales. if your items don’t have serial no you could not trace their price in purchase and sell and you should use average method.
FIFO means: first in and then first out (first purchased item should sell first of all)
LIFO means: last in first out (Last purchased item should sell first of all)
Average price: usually normal shop uses this method to calculate their profit as below:
(Average sold price – Average purchase price) * Quantity of sold items => Profit of sales