1. The income statement shows either net profit or net loss for a particular period. 2. Gains from the sale or exchange of assets are not considered as the revenue of the business. 3. The salary paid in advance is not an expense because it neither reduces assets nor increase liabilities. 4. A loss is an expenditure which does not bring any benefit to the concem. 5. All liabilities which become due for payment in one year are classified as long term liabilities. 6. Sales less cost of good sold gross profit. 7. The term current asset is used to designate cash and other assets or resources which are reasonably expected to be realized or sold or consumed within one year. I 8. If the balance of an account on the debit side of the trial balance where the benefit has already expired then it is treated as an expense. 9. If the debit side of the trading account exceeds its credit side then the balance is termed as gross profit. 10. Medicines given to the office staff by a manufacturer of medicines will be debited to salaries account.