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 items are typically listed on a single-step income statement?

Cost of goods sold, selling expenses, and administrative expenses shown separately

Total revenues and total expenses, with net income calculated as the difference

Operating income, gross profit, and income from operations

Earnings per share and retained earnings

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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 calculates net income by subtracting total expenses from total revenues. It does not separate operating and non-operating activities or provide detailed breakdowns of expenses.

Review the components typically included in a single-step income statement: Total revenues (e.g., sales revenue, service revenue) and total expenses (e.g., cost of goods sold, operating expenses, administrative expenses) are aggregated into two main categories.

Note that detailed breakdowns such as cost of goods sold, selling expenses, and administrative expenses shown separately are not part of a single-step income statement. These are typically found in a multi-step income statement.

Understand that operating income, gross profit, and income from operations are specific subtotals that appear in a multi-step income statement, not a single-step income statement.

Recognize that earnings per share and retained earnings are not part of the single-step income statement. Earnings per share is disclosed separately, often in the notes or at the bottom of the income statement, while retained earnings are part of the statement of retained earnings.