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 a business for the month of December?

Only cash revenues and cash expenses are included, ignoring any accruals or deferrals.

Revenues are categorized by type, and expenses are matched to specific revenues to calculate gross margin.

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

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

Compare the descriptions provided in the problem: Analyze each option to determine which one aligns with the single-step income statement format. Pay attention to whether revenues and expenses are grouped together or categorized separately.

Eliminate incorrect options: For example, the option stating 'Only cash revenues and cash expenses are included' is incorrect because a single-step income statement includes all revenues and expenses, not just cash-based items.

Focus on the correct description: The correct format for a single-step income statement is 'All revenues are listed together, all expenses are listed together, and net income is calculated as total revenues minus total expenses.' This matches the definition of a single-step income statement.

Conclude the analysis: Ensure that the chosen description does not include elements like categorizing revenues by type, matching expenses to specific revenues, or separating operating and non-operating items, as these are characteristics of other types of income statements, such as multi-step income statements.