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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following best describes the format of a single-step income statement?

Income tax expense is presented before operating income.

Only operating revenues and expenses are included; non-operating items are excluded.

Operating revenues and expenses are separated from non-operating items, and gross profit is shown.

All revenues are listed together, all expenses are listed together, and net income is calculated as total revenues minus total expenses.

Previous problemNext problem

Verified step by step guidance

Understand the concept of a single-step income statement: A single-step income statement is a simplified format where all revenues are grouped together, all expenses are grouped together, and net income is calculated as the difference between total revenues and total expenses.

Identify the key components of the single-step income statement: Revenues include operating and non-operating revenues, while expenses include operating and non-operating expenses. There is no separation of operating and non-operating items.

Note that gross profit is not shown in a single-step income statement. Unlike a multi-step income statement, which separates gross profit and operating income, the single-step format does not provide these subtotals.

Recognize that income tax expense is included in the total expenses section. It is not presented separately before operating income, as operating income is not calculated in this format.

Conclude that the correct description of a single-step income statement is: 'All revenues are listed together, all expenses are listed together, and net income is calculated as total revenues minus total expenses.' This format emphasizes simplicity and ease of understanding.