Sir i want to know more details about the income and profit so please give me in mor e depth as u can?

Question

Sir i want to know more details about the income and profit so please give me in mor e depth as u can?

Answer 1

Income is money that comes in (strangely enough). Therefore could be called sales or turnover. From this you have to deduct the costs, or outgoings. This would be cost of materials, wages, rent, depreciation etc. etc. These expenses are divided into two; cost of sales and administration. After deducting cost of sales you get Gross Profit. After deducting admin costs you get net profit. (which is gross for tax purposes) Deduct tax and you get Profit after tax. Then you deduct dividends etc.