Shadowing Practice: The INCOME STATEMENT for BEGINNERS - Learn English Speaking with Video
Creating lesson...
1
hey there I'm James you're watching Accounting Stuff and in this mini-series i'll show you how to make financial statements with an example financial statements are accounting reports that summarize a business's activities
2
over a period of time there are three main ones that you should know about they're called the income statement the balance sheet and the cash flow statement
3
in this video i'll show you how to make an income statement we'll cover the other two next on this channel so if you'd like to watch those then consider subscribing the income statement is a financial report that summarizes a businesses revenues and expenses over a period of time
4
it works like this if you take a business's revenue and subtract its expenses then you're left with a profit or a loss that's why it's sometimes called the profit and loss statement
5
or the P&L but we'll call this one the basic income statement it's nice and simple but it doesn't give us much information we need to expand it out to see the full detailed income statement
6
at the top we have operating revenue which is the income earned from doing business and then we take away any direct operating costs these are the cost of sales and that leaves us with
7
a gross profit or a loss beneath that we subtract any indirect operating costs or overheads to reach an operating profit or loss and finally we take away the indirect non-operating costs
8
things like interest expenses and tax which brings us down to the bottom line the business's net profit or loss
9
if you'd like to learn more about these terms then you can check out my other income statement video and i also summarize it all on my income statement cheat sheet and I'll leave links to both of those down in the description
10
how do you make a basic income statement the first thing you'll need is a trial balance a trial balance is an accounting report showing the closing balances
11
in all general ledger accounts at a point in time here's one for a dating app called Tumble it's an adjusted trial balance which means that all of Tumble's adjusting entries have already been posted
12
and it was run on December 31st which happens to be the end of Tumble's financial year this trial balance holds a complete list of Tumble's accounts and closing balances
13
debit balances go in the left column and credit balances go in the right column but how does this help us make an income statement well we can start by drawing a line
14
because accounts in a trial balance are usually arranged in order above this line we have Tumble's assets liabilities and equity these are all balance sheet accounts which we can ignore
15
we're interested in this stuff below the line Tumble's revenue and expenses which are their income statement accounts
16
the basic income statement is Tumble's revenue minus its expenses in this case they earned 60 million dollars in revenue and incurred 50,350,000 dollars in expenses
17
that leaves them with 9,650,000 dollars in profit baby but how do we make the detailed income statement
18
the method is pretty much the same if we go back to Tumble's adjusted trial balance then all we need to do is categorize their expenses like we did before cost of sales is a direct operating cost general, administrative, selling, marketing, depreciation and amortization
19
are all indirect operating costs and finally interest and tax expenses are indirect non-operating costs but please please be careful with depreciation and amortization if the long-term assets that they relate to
20
aren't used in operations then these would also be indirect non-operating costs in this video I'm assuming that they are used in operations right that's the hard bit out the way
21
all we need to do now is lift these numbers out of the adjusted trial balance and put them in the corresponding sections of the income statement that leaves us with a revenue of 60 million dollars just like before
22
less 17.5 million dollars in cost of sales which is a direct operating cost which gives us a gross profit of 42.5 million dollars then we deduct indirect operating costs
23
to reach an operating profit of 10,450,000 dollars and below that we subtract the indirect non-operating costs
24
interest and tax which leaves Tumble with a net profit of nine million six hundred and fifty thousand dollars on the bottom line
25
shout out to all of my channel members for your support in the next videos I'll show you how to make a balance sheet and a cash flow statement in the same way I'll see you then
📺 Same Channel
C11
The INCOME STATEMENT Explained (Profit & Loss / P&L)
Business EnglishUniversity StudentsWorking Adults
C11
FINANCIAL RATIOS: How to Analyze Financial Statements
Business EnglishUniversity StudentsWorking Adults
C15
ACCOUNTING BASICS: a Guide to (Almost) Everything
Business EnglishUniversity StudentsWorking Adults
C111
FINANCIAL STATEMENTS: all the basics in 8 MINS!
Business EnglishWorking Adults
C1ACCOUNTING EQUATION: Explained in (Almost) 2 Minutes!
Business EnglishUniversity StudentsWorking Adults
✨ Recommend Video
B23
197 sentences
The Financial Habits No One Talks About (But Everyone Needs)
Business EnglishDaily ConversationUniversity Students
C13
28 sentences
0925.2 financial statements and ratios
Business EnglishUniversity StudentsWorking Adults
B21
77 sentences
Getting started | Odoo Accounting
Business EnglishUniversity StudentsWorking Adults
C11
506 sentences
Analyzing Statements of Cash Flows 1 (2025 CFA® Level I Exam – FSA – Learning Module 4)
Cambridge Exam PrepBusiness EnglishUniversity Students
C11
39 sentences
Warren Buffett: How To Analyze a BALANCE SHEET
Business EnglishUniversity StudentsWorking Adults
C11
304 sentences
The Economics of Owning a Restaurant
Business EnglishUniversity StudentsWorking Adults
C1116 sentences
Cash vs Accrual Accounting Explained Simply | With Examples & Journal Entries
Business EnglishUniversity StudentsWorking Adults
C11
258 sentences
What is Accounting ? An Introduction to Accounting.
Business EnglishUniversity StudentsWorking Adults
C17
133 sentences
Intercompany Loans Explained for Accountants | English for Finance Professionals
Business EnglishUniversity StudentsWorking Adults
C13
444 sentences
Here's what's REALLY Happening...
Business EnglishUniversity StudentsWorking Adults
C177 sentences
Unit 1.1: Introduction to Business Management - IB Business Management
Cambridge Exam PrepBusiness EnglishUniversity Students
Vocabulary and speaking notes for this lesson
This C1 speaking lesson is built on the video “The INCOME STATEMENT for BEGINNERS”. The speaker keeps coming back to these words: statement, balance, income, operating, cost. This video has 25 sentences and 784 words to shadow. The speech runs for 5:04. The speaker talks at a natural 155 words per minute, close to everyday conversation. 85% of the words are among the 3,000 most common in English; the rest is worth studying before you start.
Key vocabulary in this video
The 15 most advanced words in the video, with pronunciation and meaning:
| Word | Pronunciation | Meaning |
|---|---|---|
| indirect adjective | /ˌɪn.daɪˈɹɛkt/ | Not direct |
| adjust verb | /əˈd͡ʒʌst/ | To modify. |
| subtract verb | /səbˈtɹækt/ | To remove or reduce; especially to reduce a quantity or number. |
| summarize verb | /ˈsʌməˌɹaɪz/ | To prepare a summary of (something). |
| amortization noun | /ˌæmɚtəˈzeɪʃən/ | The reduction of loan principal over a series of payments. |
| depreciation noun | /dɪˌpɹiːʃɪˈeɪʃən/ | The state of being depreciated; disparagement. |
| categorize verb | /ˈkætɪɡəˌɹaɪz/ | To assign a category; to divide into classes. |
| deduct verb | /dɪˈdʌkt/ | To take one thing from another; remove from; make smaller or less by some amount. |
| ledger noun | /ˈlɛd͡ʒɚ/ | A book for keeping notes; a record book, a register. |
| correspond verb | /ˌkoɹəˈspɑnd/ | To be equivalent or similar in character, quantity, quality, origin, structure, function etc. |
| debit noun | /ˈdɛb.ɪt/ | In bookkeeping, an entry in the left hand column of an account. |
| overhead noun | /ˈəʊvəˌhɛd/ | The expense of a business not directly assigned to goods or services provided. |
| minus | /ˈmaɪ.nəs/ | Made less or reduced by (followed by an expression of number or quantity). |
| arrange verb | /əˈɹeɪnd͡ʒ/ | To set up; to organize; to put into an orderly sequence or arrangement. |
| subscribe verb | /səbˈskɹaɪb/ | To write (one’s name) at the bottom of a document; to sign (one's name). |
Phrasal verbs you will hear
| Word | Pronunciation | Meaning |
|---|---|---|
| take away verb | /ˌteɪk əˈweɪ/ | To remove something and put it in a different place. |
| check out verb | To record the departure or withdrawal of someone or something (such as guests, employees, books, etc.). | |
| go back to verb | To stem from; to originate in. |
Grammar in this video
The structures the speaker uses most, with the exact words from the video:
| Structure | In the video |
|---|---|
| Relative clauses who / which + clause — extra information about a person or thing | revenue which is · balance which means · expenses which are |
| Passive voice be + past participle — the focus is on what happens, not who does it | been posted · was run · are usually arranged |
Pronunciation to watch
The speaker uses 18 contractions and reduced forms, such as I'll, I'm, we'll. Say them the short way, as you hear them.
- The “sh” and “zh” sounds: amortization /ˌæmɚtəˈzeɪʃən/, depreciation /dɪˌpɹiːʃɪˈeɪʃən/, shout /ʃaʊt/
- Long words — get the stress right: amortization /ˌæmɚtəˈzeɪʃən/, depreciation /dɪˌpɹiːʃɪˈeɪʃən/, categorize /ˈkætɪɡəˌɹaɪz/
How to practise with this video
- Listen to the whole video once without speaking and note the words you do not know.
- Start at 0.75× speed, shadow it sentence by sentence, then go back to normal speed once it feels easy.
- Record yourself and compare with the original, paying attention to words like indirect, adjust, subtract.
What is the Shadowing Technique?
Shadowing is a science-backed language learning technique originally developed for professional interpreter training and popularized by polyglot Dr. Alexander Arguelles. The method is simple but powerful: you listen to native English audio and immediately repeat it out loud — like a shadow following the speaker with just a 1–2 second delay. Unlike passive listening or grammar drills, shadowing forces your brain and mouth muscles to simultaneously process and reproduce real speech patterns. Research shows it significantly improves pronunciation accuracy, intonation, rhythm, connected speech, listening comprehension, and speaking fluency — making it one of the most effective methods for IELTS Speaking preparation and real-world English communication.