Income statement accounts are one of two types of general ledger accounts. (Balance sheet accounts make up the other type.) Income statement accounts are used to sort and store transactions involving revenues, expenses, gains, and losses. The income summary account is also an income statement account. The number of income statement accounts used at a large company could be in the thousands. A few examples of income statement accounts include Sales, Service Revenues, Salaries Expense, Rent Expense, Advertising Expense, Interest Expense, Gain on Disposal of Truck, etc.

Income statement accounts are described as temporary accounts because at the end of each accounting year the balances in the income statement accounts will be closed. This means that the balances will be combined and the net amount will be transferred to a balance sheet equity account. In the case of a corporation, the equity account is Retained Earnings. In the case of a sole proprietorship it is the owner's capital account.

The closing of the income statement accounts at the end of an accounting year means that the income statement accounts will begin the subsequent year with zero balances. As a result, the balances in the income statement accounts will be the year-to-date amounts.

It will be helpful to remember that every adjusting entry will require at least one income statement account and at lease one balance sheet account.