NAMA : NURLEINA RAHMATILLAH

KELAS : A4-20-01A
NPM : CA201110030
JURUSAN : ILMU ADM PUBLIK (PERPAJAKAN)

Get Ready!
Before you read the passage, talk about these questions.
1 What information goes on income statements?
contains information about the source from which the income was obtained, and what expenses
were borne by the company in the period concerned. ... If the results are greater than costs, it
means profit, on the other hand, if the results are less than costs, it means a loss.

2 How do companies use income statements?

 The single step statement only shows one income category and one expense category. This
format is less useful for external users because they cannot calculate efficiency and
profitability ratios with a limited data scope. This report is simple, does not contain details of
the financial turnover that occurs in the company and usually this income statement is used
by start-up trading companies or SMEs.
 there is a Multiple step or multi-step report, the accountant must separate the cost account
into another account that is more relevant, more detailed and usable based on its function.
Cost of goods sold, operating and non-operating costs are separated and used to calculate
gross profit, operating profit and net income.This type of financial report is usually based on
the standards used for reporting the profit and loss of large trading companies or companies
that have many stakeholders, such as creditors and investors.
Reading

2 Read the income statement and magazine article. Then, mark the following statements as true (T)
or false (F).

1. T "Bottom line' means net income. Operating margin minus taxes is gross margin P&L
statements show nformation from a period of time

2. F Operating margin minus taxes is gross margin.

3. T P&L statements show information from a period of time.

Vocabulary

3 Match the words (1-5) with the definitions (A-E).

1-gross margin D
2 sales revenue E
3 taxes B
4 P &L A
5 general and administrativo expenses C
A a statement showing financial information for a certain period
B money that is paid to a govemment
C the costs associated with organizing and running a business
D an amount that is calculated by subtracting cost of goods sold
E the money that is received from selling goods or services

4 Fill blanks with the correct words and phrases: operating margin, income statement, net income,
selling.
1 Subtract taxes from the operating margin to find net income.
2. selling is the act of exchanging goods for money.
3. income statement is the amount of money retained after all expenses is a document
showing
4 A(n) net income how much money was made.

5. Listen and read the income statement and article again. What is deducted from sales revenue to
show the bottom line?
The cost of those goods is deducted from the revenue. Next the general and administrative expenses
are deducted. Finally, taxes are subtracted. The number that remains on the bottom line is called net
income This amount is the companys bottom line.