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An income statement summarizes your income and expenses over a period, showing your net financial gain or loss.
In Depth
An income statement, also known as a profit and loss (P&L) statement, provides a clear picture of your financial performance over a set time, like a month or year. It lists all money earned (income) and all money spent (expenses). By subtracting expenses from income, you can see if you made a profit or incurred a loss during that period, helping you understand your financial health.
Example
Reviewing my monthly income statement helps me see if I'm spending more than I earn.