What are income statements?

An income statement is a summary of accounts that affects the Profit and loss of an enterprise. An Income Statement, also called a Profit and Loss Statement (P&L), is a financial statement for companies that indicates how net revenue (money received from the sale of products and services before expenses are taken out, also known as the "top line") is transformed into net income (the result after all revenues and expenses have been accounted for, also known as the "bottom line"). The purpose of the income statement is to show managers and investors whether the company made loss or profit during the period being reported.