Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Single-step Income Statement

Financial Accounting

4. Merchandising Operations

Single-step Income Statement

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Multiple Choice

Which financial statement provides a summary that shows how much money a business has made or lost during a specific period using a single-step approach?

Statement of Cash Flows

Statement of Retained Earnings

Balance Sheet

Single-step Income Statement

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Verified step by step guidance

Understand the purpose of the Single-step Income Statement: It is a financial statement that summarizes revenues and expenses to calculate net income or net loss for a specific period.

Recognize the structure of the Single-step Income Statement: It uses a straightforward approach where all revenues are listed first, followed by all expenses, and the difference between the two is calculated to determine net income or net loss.

Compare the Single-step Income Statement to other financial statements: Unlike the Statement of Cash Flows, which tracks cash inflows and outflows, or the Balance Sheet, which shows the financial position at a specific point in time, the Single-step Income Statement focuses solely on profitability during a period.

Identify the components of the Single-step Income Statement: Revenues include sales, service income, and other income sources, while expenses include costs like salaries, rent, utilities, and other operating expenses.

Understand the calculation process: The formula for net income or net loss is \( \text{Net Income (or Loss)} = \text{Total Revenues} - \text{Total Expenses} \). This simple calculation is the hallmark of the single-step approach.