Income statement and the profit and loss account are one and the same. It is called profit and loss account (P&L account) in India and is called Income statement in other countries. Income Statement and the Profit & Loss Account mean one and the same. Unlike the balance sheet, which is viewed at a point of time, the income statement is viewed over a period of time. This period can be one quarter or one year as is the norm. In most other countries, this periods ends on December 31st each year while in India the period normally ends on March 31st. One more thing to note in Income Statement! Accounting is done on an accrual basis that means you book all incomes and expenses when they are accrued; not exactly when they are actually paid or received. So, if interest is due on the 31st of June, then it will be account for as an expense even if it is not yet paid out. When all the accrued incomes and expenses for the financial period accounted for, the net result that you have is the income statement or the P&L account. The P&L account is critical to understand whether the business under consideration is profitable or not and this gives rise to a number of other analytical ratios. The top line in any income statement is the sales or the net revenues from business. The bottom line is the net profits after considering all expenses. It is out of this net profit that dividends are paid out.