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 is characterized by the formula: revenues $-\,$ cost of goods sold $-\,$ expenses $=\,$ net income?

Multi-step Income Statement

Statement of Retained Earnings

Balance Sheet

Single-step Income Statement

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Verified step by step guidance

Understand the formula provided in the problem: revenues $-\,$ cost of goods sold $-\,$ expenses $=\,$ net income. This formula represents the calculation of net income, which is a key component of a financial statement.

Recognize that the formula simplifies the process of determining net income by grouping all revenues and subtracting all expenses, including the cost of goods sold, in a single step.

Recall the characteristics of the Single-step Income Statement. This type of income statement uses a straightforward approach to calculate net income by subtracting total expenses from total revenues in one step.

Compare the formula to the structure of other financial statements mentioned in the problem: the Multi-step Income Statement, Statement of Retained Earnings, and Balance Sheet. Note that these statements have different purposes and structures. For example, the Multi-step Income Statement separates operating and non-operating activities, while the Balance Sheet focuses on assets, liabilities, and equity.

Conclude that the formula provided aligns with the Single-step Income Statement, as it directly calculates net income without breaking down operating and non-operating activities.