Which of the following appears on both a single step and a multiple step income statement?
Single step income statement or multi step income statement? Both have advantages and disadvantages. Your choice of format depends on what you intend to use your income statement for, and what level of financial detail you're intending to provide. Show The purpose of an income statement is to provide users with information about a business's profitability over a specific reporting period. However, there are two formats that can be used to prepare an income statement—the single step format and the multi step format—and many small business users wonder which format their businesses should be using. While both formats have advantages and disadvantages, your choice of format depends on what you intend to use your income statement for. Single Step Income StatementWhat is a single-step income statement? If you're a sole proprietor or a partner in a partnership, it's likely that your business's income statement is being presented in this simplified format. Unlike the multi-step income statement, the single-step format is more of a basic income statement, without a high level of detail:
Multi-Step Income StatementWith its more detailed approach to income numbers, the multi-step income statement is the format that corporations are required to use. Because this format provides users with more information than the single-step format, businesses with simpler structures, such as a sole proprietorship or partnership, may occasionally prefer to use this format in order to provide potential investors or creditors with the more detailed information they may require:
Which Income Statement Format Should You Use?Simpler business structures, such as sole proprietorships and partnerships, have the option of using either the single-step or the multi-step format. However, while the single step format is an easier income statement to prepare, if you will be providing potential creditors or investors with financial statements so they can assess the viability of your business, the added detail provided by a multi-step income statement may make this format the better option of the two. Knowing how—and when—to use the statements you've created is as important as creating them correctly in the first place. What is shown on both multiple step and singleBoth single-step and multi-step income statements report on the profits or losses, expenses, and business revenue.
Which of the following accounts would not appear on both a singleGross profit would not appear on both a single-step income statement and a multiple-step income statement.
Which of the following is shown on a multiWhen doing a multiple step income statement, one must remember the key elements. They are: Net Sales, Cost of Goods Sold, Gross Profit, Total Operating Expenses, net gain/loss from other activities, Income before taxes, Income tax expense, and Net Income.
What is the singleA single-step income statement arrives at a company's net income in one step or subtraction: [total revenues and gains] – [total expenses and losses].
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