What Are the Key Elements of an Income Statement? An income statement has four key elements: revenue, expenses, cost of goods sold (COGS), and net income. Revenue: the total revenue or gross ...

account for their resale inventory under cost of goods sold, also known as cost of sales. This refers to the total price paid for the products sold during the income statement's accounting period.

According to the rules of FIFO, if the bakery sells 200 loaves on Wednesday, the COGS (on the income statement) is $1 per loaf because that was the cost of each of the first loaves in inventory.