Formats for the Income Statement 386-400
Q 386. revenues, expenses, and profit
Q 386. The income statement provides what three main pieces of information?
Q 387. total revenues and total expenses
Q 387. What does the single-step income statement focus on?
Q. 388. gross margin
Q 388. What line item is found only on the multi-step income statement?
Q 389. cost of goods sold Every company that sells a product has an expense of cost of goods sold. This expense reflects the cost to the company of the product that it sold during the period.
Q 389. What is the most common expense of a merchandiser (non -service -oriented business) related to the product?
assets
Q 390. Which of the following is not reported on an income statement? A. assets B. revenues C. gross profit D. expenses E. net income
single-step format and multi -step format The multi -step format is one of the formats of the income statement. Multi -step is the format more commonly used because it provides more detail to the users of financial statements. The less common format is called the single-step format
Q 391. What are the two formats of an income statement?
Gross margin is the difference between sales revenues and cost of goods sold.
Q 392. How is gross margin calculated?
income statement The income statement allows users to analyze a company's historical performance and develop expectations for future performance. It allows the users to compare performance between companies
Q 393. What is the primary tool used by decision makers to evaluate a company's performance and estimate its future performance?
operating earnings Operating earnings are characteristic of the multi -step income statement.
Q 394. What line item is found only on the multi -step income statement?
Earnings before income tax are reported only on the multi -step income statement. Earnings before income tax are one of the fundamental measures of profit reported on the multi -step income statement format.
Q 395. What income statement format(s) are earnings before income tax reported on?
rent expense Rent expenses are an operating expense, while the other expenses listed are non -operating.
Q 396. Which of the following expenses is considered an operating expense? A. interest expense B. rent expense C. loss on sale of marketable securities D. other income E. income tax expense
income tax expense Income tax expense is reported below operating income and is not an operating expense
Q 397. Which of the following items is presented below operating income on a typical multi -step income statement? A. cost of goods sold B. gross margin C. revenues D. selling expenses E. income tax expense
will not be reported The single-step income statement doesn't report gross profit; it only reports total revenues and expenses.
Q 398. (see page 59) How much will this company report on its single-step income statement as gross profit?
sales revenues Sales revenues are one of the fundamental pieces of the income statement and are reported on the income statement regardless of the format used.
Q 399. What line item is found on both the single-step and the multi -step income statement formats?
single-step income statement The single-step income statement provides only one bottom line profit number, and it does so by summing up all expenses and deducting them from total revenues. There is no other detail provided on the single-step income statement.
Q 400. Which income statement format doesn't separate operating expenses from non - operating expenses?
