The components of an Income statement

An Income statement shows how profitable a business has been during the period stated in it. The period of time can be a week, a month or a year.
The main components of Income statement are:
1-Revenues: The amount that has been earned
2-Expenses: The expenses needed to generate the revenue

A. Revenues
Under accrual basis of accounting the revenue is recorded when it is earned and not when the money is received. The accrual method of accounting is opposite to the other accounting method which is cash method of accounting. This is due to one of the basic accounting principles known as the revenue recognition principle.

B. Expenses
Income statement shows expenses that incurred during the period stated in the income statement regardless of when the company actually paid for the expenses.
Recording expenses with their related revenues is associated with another basic accounting principle known as the matching principle.