Lesson: Income Measurement

In this lesson, Nick Palazzolo, CPA, breaks down the essentials of income measurement, guiding through the steps from sales revenue to net income. He touches on the calculation of gross profit after deducting the cost of goods sold and the subsequent subtraction of operating expenses to arrive at the net income or loss. Nick also clarifies the differences in income measurement for service-based businesses, like Netflix and professional firms, which have no cost of goods sold or physical inventory. He encourages a thorough understanding and memorization of the income statement process, suggesting the use of printed financial statements as a reference tool to reinforce learning and enhance exam performance.