On an income statement does it matter which way you list the revenues and expenses?

Question

On an income statement does it matter which way you list the revenues and expenses?

Answer 1

Yes. There are certain accounting conventions that should be followed in order to make the financial statements as easy to understand as possible.

I only know US GAAP, the basis for all accounting in the United States except for schools, governments, and other non-profits, so we'll use that basis. On the income statement, you list the revenues first, and subtotal. You then list expenses, and subtotal. Then you show a line where you have subtracted expenses from revenues, and call this "pre-tax income" or "income before taxes." Then you show a line for tax expense. Finally, you show a line all the way at the bottom, titled Net Income, that shows the pre-tax income less the taxes. (This is also the basis for the expression "the bottom line," by the way.)

Good luck!

Answer 2

No, but the best way that I have seen work is to list the Revenue Streams first, with revenue monthly total, and a year revenue total, skip down a few row then do the same with your expenses, then under that you put yearly total revenue and yearly total expenses, and if you have any the total ROI.