Is generally used to describe revenue derived from selling of goods. A More specific account name may be used to identify the goods sold such as Office supplies sales, Book sales, Food sales, etc.

This is an account used by companies that sells goods instead of services. For trading operations, Cost of sales collects the cost of the merchandise sold. This includes the purchase price of inventory, brokerage, and shipment cost to bring the goods to the premises of the company.

Refer to all other expenses related to the operation of the business, other than cost of sales. Theses include salaries of employees, supplies, utilities (electricity, telephone and water bills), gasoline expense, representation, bad depts expense, depreciation and amortisation.

Groups All revenue items together and all expense items together. - because net income is computed using only one step, deducting total expenses from total revenues.

Is characterized by the presentation of several subtotals until net income is determined. - Is more popularly used in business.