5. Explain the two forms of income statement.

 There are two forms of income statements. First is the functional presentation; it
is the traditional and common form of income statement; the functional
presentation is also known as the cost of a good sold method. The second is
natural presentation. This presentation is referred to as the nature of the expense
method. Under this form, expenses are aggregate according to their nature and
not allocated among the various functions within the entity.