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 the year ended December 31?

All revenues are grouped together and all expenses are grouped together; net income is calculated as total revenues minus total expenses.

Only operating revenues and expenses are included; non-operating items are excluded from the statement.

Income tax expense is presented before operating income, and extraordinary items are listed separately.

Operating revenues and expenses are separated from non-operating items, and gross profit is shown before 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 and all expenses are grouped together. Net income is calculated as total revenues minus total expenses.

Identify the key characteristics of a single-step income statement: It does not separate operating revenues and expenses from non-operating items, nor does it show gross profit or extraordinary items separately.

Compare the provided options to the definition of a single-step income statement: Look for the option that aligns with the grouping of all revenues and all expenses together, and the calculation of net income as total revenues minus total expenses.

Eliminate options that include features not relevant to a single-step income statement: For example, options mentioning separation of operating and non-operating items, gross profit, or extraordinary items are not applicable to this format.

Select the correct description: The correct answer should reflect the simplicity of the single-step income statement format, focusing on the grouping of revenues and expenses without additional categorizations or separations.