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

Multi-step Income Statement

Financial Accounting

4. Merchandising Operations

Multi-step Income Statement

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Multiple Choice

Which of the following are the three main parts of a multi-step income statement?

Operating Activities, Investing Activities, Financing Activities

Revenues, Expenses, Dividends

Assets, Liabilities, Equity

Gross Profit, Operating Income, Net Income

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Verified step by step guidance

Understand that a multi-step income statement is a detailed financial report that separates operating and non-operating activities to provide a clearer picture of a company's financial performance.

Recognize that the three main parts of a multi-step income statement are Gross Profit, Operating Income, and Net Income, as these represent key stages in the calculation of a company's profitability.

Gross Profit is calculated by subtracting the Cost of Goods Sold (COGS) from total Revenues. This step focuses on the profitability of core business operations before considering other expenses.

Operating Income is determined by subtracting Operating Expenses (such as selling, general, and administrative expenses) from Gross Profit. This step reflects the income generated from regular business operations.

Net Income is calculated by subtracting all non-operating expenses (such as interest and taxes) from Operating Income. This final step represents the overall profitability of the company after accounting for all expenses.