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 statements about the single-step income statement is true?

It separates expenses into cost of goods sold and operating expenses.

It reports gross profit as a separate line item.

It presents all revenues together and all expenses together, without separating operating and non-operating items.

It requires the classification of current and non-current items.

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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 that aggregates all revenues and all expenses into two distinct categories without further classification.

Review the structure of the single-step income statement: Unlike a multi-step income statement, it does not separate operating and non-operating items, nor does it report gross profit as a separate line item.

Analyze the options provided: Evaluate each statement to determine whether it aligns with the characteristics of a single-step income statement. For example, separating expenses into cost of goods sold and operating expenses is a feature of a multi-step income statement, not a single-step income statement.

Focus on the correct statement: The single-step income statement presents all revenues together and all expenses together, without separating operating and non-operating items. This is the defining feature of this format.

Eliminate incorrect options: The single-step income statement does not require the classification of current and non-current items, nor does it report gross profit as a separate line item. These features are associated with other financial statement formats.