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

A(n) _____ is a summary of what a company has earned and spent over a given period.

Single-step income statement

Statement of retained earnings

Statement of cash flows

Balance sheet

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Understand the purpose of each financial statement: A single-step income statement summarizes revenues and expenses to calculate net income. The statement of retained earnings shows changes in retained earnings over a period. The statement of cash flows details cash inflows and outflows. The balance sheet provides a snapshot of assets, liabilities, and equity at a specific point in time.

Identify the key phrase in the question: 'summary of what a company has earned and spent over a given period.' This indicates a focus on revenues and expenses, which are typically covered in an income statement.

Recall that a single-step income statement is a simplified format that lists all revenues and expenses in one step to calculate net income, making it the most relevant option for summarizing earnings and expenditures.

Eliminate the other options: The statement of retained earnings focuses on changes in equity, not earnings and expenses. The statement of cash flows focuses on cash transactions, not a summary of earnings and expenses. The balance sheet provides a snapshot of financial position, not a summary of earnings and expenses.

Conclude that the correct answer is 'Single-step income statement,' as it directly summarizes what a company has earned and spent over a given period.