A legal doctrine that holds an individual or business accountable for damages whether or not it was at fault. In a strict liability case, no matter how careful the business is in its product or service, if harm results from use, the individual or business is liable.
Along with the balance sheet, cash flow statement and the statement of changes in ownersâ equity, the income statement is also one of the essential means of financial reporting. It indicates whether or not the firm has made money during the period reported.
Preparing the Income Statement. 1  1. Set up the income statement page. The income statement shows how much money a company earned and spent over a period time. 2  2. List sources of revenue. List the different sources of income and the amounts that were earned. 3  3. Report the costs of goods sold.