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

Multi-step Income Statement

Financial Accounting

4. Merchandising Operations

Multi-step Income Statement

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Multiple Choice

Which of the following statements related to the multi-step income statement is FALSE?

A multi-step income statement separates operating revenues and expenses from non-operating items.

A multi-step income statement does not report income from operations separately from other income.

Gross profit is calculated by subtracting cost of goods sold from net sales.

The multi-step income statement provides more detailed information than a single-step income statement.

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Verified step by step guidance

Step 1: Understand the purpose of a multi-step income statement. It is designed to provide detailed information by separating operating revenues and expenses from non-operating items, and it reports income from operations separately from other income.

Step 2: Analyze the statement 'A multi-step income statement does not report income from operations separately from other income.' This is incorrect because the multi-step income statement specifically highlights income from operations as a separate line item to distinguish it from non-operating income.

Step 3: Review the calculation of gross profit. Gross profit is calculated by subtracting the cost of goods sold (COGS) from net sales. This is a key feature of the multi-step income statement.

Step 4: Compare the multi-step income statement to the single-step income statement. The multi-step format provides more detailed information by categorizing revenues and expenses into operating and non-operating sections, unlike the single-step format which aggregates all revenues and expenses.

Step 5: Conclude that the false statement is 'A multi-step income statement does not report income from operations separately from other income,' as this contradicts the fundamental structure of the multi-step income statement.