--- title: "Profit and loss statement: Definition and Sources | Tax Glossary" description: "A profit and loss statement, also called an income statement, shows a business's income and expenses over a set period of time." url: https://wallacecpa.multisites.ai/glossary/profit-and-loss-statement publisher: Wallace CPA phone: +1-877-682-1171 quote: https://wallacecpa.multisites.ai/contact --- Bookkeeping and payroll # Profit and loss statement A profit and loss statement, also called an income statement, shows a business's income and expenses over a set period of time. A profit and loss statement shows what came in and what went out for a month, quarter or year. The IRS says an income statement shows the income and expenses of the business for a given period. The bottom line is profit or loss. Owners use it to price work, control costs and prepare tax returns. Lenders ask for it too. The SBA tells established businesses to include income statements, balance sheets and cash flow statements for the last three to five years in a loan business plan. The report depends on your [chart of accounts](https://wallacecpa.multisites.ai/glossary/chart-of-accounts) and your [accrual accounting](https://wallacecpa.multisites.ai/glossary/accrual-accounting) or cash choice. See the [business advisory page](https://wallacecpa.multisites.ai/services/business-advisory#financing) for bank financing. [Wallace CPA can helpBusiness advisory](https://wallacecpa.multisites.ai/services/business-advisory) ## Related terms - [Balance sheet](https://wallacecpa.multisites.ai/glossary/balance-sheet) - [Chart of accounts](https://wallacecpa.multisites.ai/glossary/chart-of-accounts) - [Accrual accounting](https://wallacecpa.multisites.ai/glossary/accrual-accounting) - [Bookkeeping](https://wallacecpa.multisites.ai/glossary/bookkeeping) ## Sources 1. [IRS: Publication 583, Starting a business and keeping records](https://www.irs.gov/publications/p583) 2. [SBA: Write your business plan](https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan) ## Talk to Wallace CPA Call the Southlake office and say what you need: a return, an IRS letter, your books or a new business. Have the notice or last year's return nearby if you have one. [Call (877) 682-1171](tel:+1-877-682-1171)[Send a message](https://wallacecpa.multisites.ai/contact) 180 State Street, Suite 225, Southlake, TX 76092