Multiple Choice
Which of the following items are typically found on a single-step income statement?
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4. Merchandising Operations
Single-step Income Statement
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following line items appears on a single-step income statement?
A
Operating Income
B
Earnings Before Interest and Taxes (EBIT)
C
Gross Profit
D
Total Revenues
Verified step by step guidance1
Understand the structure of a single-step income statement: It simplifies the presentation of financial performance by grouping all revenues together and subtracting all expenses to arrive at net income. It does not separate operating and non-operating activities.
Review the line items typically included in a single-step income statement: Total revenues and total expenses are the primary categories. Unlike multi-step income statements, it does not include subtotals like operating income, EBIT, or gross profit.
Analyze the given options: Operating Income, EBIT, and Gross Profit are subtotals that appear in multi-step income statements, not single-step income statements.
Identify the correct line item: Total Revenues is the appropriate line item for a single-step income statement because it represents the sum of all revenue sources without categorization.
Conclude that Total Revenues is the correct answer, as it aligns with the simplified format of a single-step income statement.
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