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 one of the following statements related to a single-step income statement is correct?

A single-step income statement reports gross profit as a separate line item.

A single-step income statement distinguishes between selling and administrative expenses.

A single-step income statement groups all revenues together and all expenses together, without separating operating and non-operating items.

A single-step income statement requires the calculation of income from operations.

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Verified step by step guidance

Step 1: Understand the concept of a single-step income statement. A single-step income statement is a simplified format that groups all revenues together and all expenses together, without distinguishing between operating and non-operating items.

Step 2: Analyze the structure of a single-step income statement. Unlike a multi-step income statement, it does not report gross profit as a separate line item or distinguish between selling and administrative expenses.

Step 3: Review the calculation process for a single-step income statement. The net income is calculated by subtracting total expenses from total revenues, without requiring intermediate calculations such as income from operations.

Step 4: Compare the given statements to the characteristics of a single-step income statement. Identify which statement aligns with the definition and structure of a single-step income statement.

Step 5: Conclude that the correct statement is: 'A single-step income statement groups all revenues together and all expenses together, without separating operating and non-operating items.' This matches the simplified format of a single-step income statement.