Income statement glossary terms for bookkeepers: P&L, revenue, COGS, operating expenses, gross margin, and month-over-month review.
The income statement is where owners look first, but bookkeepers know it depends on hundreds of small categorization calls. A Stripe fee posted to subscriptions, a contractor payment posted to wages, or a refund posted to revenue can make the P&L tell the wrong story.
Start with the income statement, or P&L. It shows revenue, cost of goods sold, gross profit, operating expenses, and net income for a period. The useful question is not just "did the client make money?" It is whether the categories are consistent enough to compare this month to last month.
Use this sub-hub for income statement vocabulary: revenue recognition, COGS, gross margin, operating expenses, other income, reimbursements, refunds, and P&L review. Growthy categorizes routine transactions automatically and flags lower-confidence items, so the bookkeeper spends less time clicking and more time checking whether the trend actually makes sense.
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The income statement (P&L) reports revenue, expenses, and net income for a period. Here's how to read each section, what it reveals about the business, and how to set up class- and location-based custom P&L views in QBO.