Income Statement Accounts

Income statement accounts are those accounts in the general ledger that are used to form the income statement.

During the accounting period, a business will update the accounts in its general ledger.

At period-end, the business uses this information to prepare two reports.

First, it prepares an income statement.

Then it prepares a balance sheet.

The information for the income statement comes from the income and expense accounts.

This is why the income and expense accounts are known as income statement accounts.

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