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    MarchSpring's Avatar
    MarchSpring Posts: 2, Reputation: 1
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    #1

    Jun 4, 2007, 07:45 PM
    Why sales have to subtract the amount of cost of good sold?
    Why sales have to subtract the amount of cost of good sold?:confused: I'm just a beginner and I have no idea in the profit and loss statement... I don't understand... please lend me a hand on this,really appreciate for the help!;)
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Jun 10, 2007, 08:54 AM
    The goal of the profit and loss statement is to arrive at a Net Income.

    So you received let's say 100 in Sales. Is that all profit? No. You have expenses.

    So you will deduct all your expenses, be it the COGS or Rent Expense or Advertising Expense or whatever to arrive at your Net Income.
    MarchSpring's Avatar
    MarchSpring Posts: 2, Reputation: 1
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    #3

    Jun 12, 2007, 01:53 AM
    Quote Originally Posted by CaptainForest
    The goal of the profit and loss statement is to arrive at a Net Income.

    So you received let's say 100 in Sales. Is that all profit? No. You have expenses.

    So you will deduct all your expenses, be it the COGS or Rent Expense or Advertising Expense or whatever to arrive at your Net Income.

    Thanks for the reply.. :p I undertsand now~ =) really appreciate~:D
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