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

How is income tax expense reported on a single-step income statement?

It is included in total expenses and deducted from total revenues to determine net income.

It is reported separately after operating income.

It is deducted from total revenues to arrive at net income.

It is not reported on the single-step income statement.

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Verified step by step guidance

Understand the structure of a single-step income statement: In this format, all revenues are grouped together, and all expenses are grouped together. Net income is calculated by subtracting total expenses from total revenues.

Recognize that income tax expense is considered part of total expenses in a single-step income statement. It is not reported separately after operating income, as operating income is not a specific line item in this format.

Note that income tax expense is included in the total expenses category and contributes to the deduction from total revenues to determine net income.

Clarify that the single-step income statement does not separate income tax expense as a distinct line item or exclude it from the statement entirely. It is integrated into the total expenses.

Conclude that income tax expense is reported as part of total expenses and deducted from total revenues to arrive at net income in a single-step income statement.