Multiple Choice
Which financial statement reports the net income or loss for a specific period of time?
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4. Merchandising Operations
Single-step Income Statement
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which financial statement reports revenues and expenses in a single-step format?
A
Income Statement
B
Statement of Retained Earnings
C
Statement of Cash Flows
D
Balance Sheet
Verified step by step guidance1
Understand the purpose of each financial statement: The Income Statement reports revenues and expenses, the Statement of Retained Earnings shows changes in retained earnings, the Statement of Cash Flows tracks cash inflows and outflows, and the Balance Sheet presents assets, liabilities, and equity.
Recognize that the Income Statement is specifically designed to summarize a company's financial performance over a period by listing revenues and expenses.
Learn about the single-step format: In this format, all revenues are grouped together, and all expenses are grouped together, with the net income calculated as the difference between total revenues and total expenses.
Compare the single-step format to other formats, such as the multi-step format, which separates operating and non-operating activities and provides subtotals like gross profit.
Conclude that the financial statement reporting revenues and expenses in a single-step format is the Income Statement.
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