In contrast with a multiple step-income statement, a single-step income statement does not show...
Question:
In contrast with a multiple step-income statement, a single-step income statement does not show the amount of:
a) income taxes on continuing operations.
b) cost of goods sold.
c) gross profit.
d) earnings per share.
Income Statement:
An income statement is a financial report that shows the company's financial performance during a specific period. It accounts for the company's revenue and expenses, resulting in an end-of-period profit. It can be presented in a multiple-step income statement or single-step income statement.
Answer and Explanation: 1
- Answer: c) gross profit.
Under the single-step income statement, expenses are deducted from revenues to compute the net income. On the contrary, under the multiple-step income statement, operational and non-operational expenses and revenues are separated, and the net income is determined in three steps. The cost of goods sold is deducted from revenue to compute for the gross profit, and operating expenses are deducted from gross profit to compute for net income.
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What Is an Income Statement? - Purpose, Components & Format
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