Question

The type of income statement that reports a series of subtotals such as gross profit, operating income, and income before taxes is a ______ income statement.

Answer 1

Answer:

The correct answer is letter "C": multiple-step.

Explanation:

A Multiple-Step Income Statement is a detailed summary divided into two main sections: the operating and non-operating items. The operating items include all the accounts related to gross profit, sales, and administrative expenses. In the non-operating section, all extraordinary expenses and return accounts are recorded. Its counterpart, the Single-Step Income Statement, only portraits revenue, expenses, and the net income.