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 of the following best describes the format of a single-step income statement for the year ended December 31?

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

Income tax expense is presented before operating income, and extraordinary items are listed separately.

Only operating revenues and expenses are included, with no mention of non-operating items or income taxes.

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

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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.

Review the structure of the single-step income statement: Unlike a multi-step income statement, it does not separate operating and non-operating items or show gross profit. It focuses on simplicity by presenting revenues and expenses in a straightforward manner.

Analyze the options provided in the problem: Evaluate each description to determine which aligns with the single-step income statement format. Pay attention to whether revenues and expenses are grouped together and whether net income is calculated directly.

Eliminate incorrect options: For example, options mentioning extraordinary items, separating operating and non-operating items, or showing gross profit are inconsistent with the single-step income statement format.

Select the correct description: The correct answer should describe the grouping of all revenues together, all expenses together, and the calculation of net income as total revenues minus total expenses.