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

A single-step income statement can be identified by which of the following formats?

All revenues are grouped together and all expenses are grouped together, with net income calculated as total revenues minus total expenses.

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

Income from continuing operations is reported separately from discontinued operations.

Expenses are classified by function, such as cost of goods sold, selling, and administrative expenses.

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Verified step by step guidance

Understand the concept of a single-step income statement: A single-step income statement simplifies the presentation of financial performance by grouping all revenues together and all expenses together, without separating operating and non-operating items or showing gross profit.

Recognize the key feature: The net income is calculated as total revenues minus total expenses, without additional classifications or subtotals such as gross profit or income from continuing operations.

Compare the single-step format to other formats: Unlike multi-step income statements, single-step statements do not separate operating and non-operating items or classify expenses by function (e.g., cost of goods sold, selling, administrative).

Identify the correct format: The single-step income statement groups all revenues together and all expenses together, with net income calculated as the difference between the two.

Eliminate incorrect options: The other formats mentioned in the problem (e.g., separating operating and non-operating items, showing gross profit, or classifying expenses by function) are characteristics of multi-step income statements, not single-step income statements.