#cfa-level-1 #reading-23-financial-reporting-mechanics
Note that
net income (loss) is the difference between two of the elements: revenue and expenses.
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3.2. Accounting Equationscome statement presents the performance of a business for a specific period of time. The equation reflected in the income statement is the following:
Equation (3)
Revenue – Expenses = Net income (loss)
<span>Note that net income (loss) is the difference between two of the elements: revenue and expenses. When a company’s revenue exceeds its expenses, it reports net income; when a company’s revenues are less than its expenses, it reports a net loss. Other terms are used synonymously with Summary
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