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 what a single-step income statement represents?

A statement that separates operating and non-operating activities to calculate gross profit.

A statement that details changes in equity accounts over a period.

A financial statement that shows total revenues and total expenses to determine net income in a single calculation.

A report that only lists cash inflows and outflows for a period.

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Verified step by step guidance

Step 1: Understand the concept of a single-step income statement. It is a simplified financial statement that calculates net income by subtracting total expenses from total revenues in a single calculation, without separating operating and non-operating activities.

Step 2: Compare the given options to the definition of a single-step income statement. Eliminate options that do not align with the concept.

Step 3: Option A describes separating operating and non-operating activities, which is characteristic of a multi-step income statement, not a single-step income statement.

Step 4: Option B refers to changes in equity accounts, which is related to the statement of changes in equity, not the single-step income statement.

Step 5: Option D mentions cash inflows and outflows, which is characteristic of the cash flow statement, not the single-step income statement. Therefore, the correct description is the one that matches the definition of a single-step income statement: 'A financial statement that shows total revenues and total expenses to determine net income in a single calculation.'