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 financial statement summarizes revenues and expenses to determine net income or loss in a single step?

Statement of Cash Flows

Single-step Income Statement

Balance Sheet

Statement of Retained Earnings

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Verified step by step guidance

Understand the purpose of each financial statement: The Statement of Cash Flows shows cash inflows and outflows, the Balance Sheet provides a snapshot of assets, liabilities, and equity, and the Statement of Retained Earnings tracks changes in retained earnings. The Single-step Income Statement summarizes revenues and expenses to determine net income or loss.

Recognize that the Single-step Income Statement is designed to simplify the calculation of net income or loss by subtracting total expenses from total revenues in one step.

Identify the components of the Single-step Income Statement: Revenues (e.g., sales revenue, service revenue) and Expenses (e.g., cost of goods sold, operating expenses). These are grouped into two categories for simplicity.

Understand the formula used in the Single-step Income Statement: \( \text{Net Income (or Loss)} = \text{Total Revenues} - \text{Total Expenses} \). This formula is applied directly to summarize the financial performance.

Conclude that the Single-step Income Statement is the correct answer because it directly summarizes revenues and expenses to determine net income or loss in a single calculation.