Profit Statement in iGreen Accounting

In any business owner and manager it is very important to have exact report of profit and loss statement. but calculating profit statement is not easy process. actually profit and loss statement is a sub statement of income statement in every company

Methods of Profit Statement

There many methods to get profit statement report but commonly we can list them as below:

  • FIFO
    • It means price of first item has been purchased and and price of the first sales item
  • LIFO
    • It mean price of the latest item for purchase price and price of the first sales item
  • Average of prices
    • It means average price of all purchases and Average price of all sales
  • Unique Price code
    • In this method, each item will get a unique serial number label with a its price of purchase and sales

FIFO will be used for food industrial and business with expiring date of products, LIFO will be used for update to date businesses like CAR companies,  Average method is common method for shops and retail stores.

Unique price code is the best method, each item in purchase time will get a unique barcode label with a unique serial number and at sales time, this barcode will be scanned and entered in invoice. so that, each item one by one, has its purchase price and sales price exactly.

iGreen accounting supports methods of average price and unique price code. for price code method , iGreen accounting will give you printed labels to stick it on items as same time of purchase.

 

Sales Income Statement in Accounting

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

 

Single-Step Income Statement

Multiple-Step Income Statement