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 items appears on a single-step income statement?

Earnings per share

Gross profit

Total revenues and total expenses

Operating income

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Verified step by step guidance

Understand the structure of a single-step income statement: It is a simplified format that calculates net income by subtracting total expenses from total revenues without breaking down categories like operating income or gross profit.

Identify the key components of a single-step income statement: Total revenues and total expenses are the primary elements included, as they summarize the financial performance in a straightforward manner.

Clarify why certain items are excluded: Items like gross profit, operating income, and earnings per share are not explicitly listed because the single-step format does not separate operating and non-operating activities or provide detailed calculations.

Focus on the calculation process: The single-step income statement emphasizes the overall net income by using the formula: Net Income = Total Revenues - Total Expenses.

Review the purpose of the single-step format: It is designed for simplicity and ease of understanding, making it suitable for businesses that do not require detailed breakdowns of financial performance.