Q5-20RQ - Horngren'S Financial And Managerial Accounting

Question

Describe the single-step income statement.

Step-by-Step Solution

Answer

A single-step income statement contains the operating and non-operating revenues and expenses and reflects the net income of a business.

Meaning of Income Statement

An income statement is one of the components of financial statements that describes the revenues and expenses during one accounting period. This report is prepared to ascertain the net profits or net losses.

Description of single-step income statement

A single-step income statement presents a simplified overview of a business entity's revenues and expenses. It directly represents the net income of the entity in the bottom line and does not bifurcate the operating and non-operating activities section.

It considers total revenues and expenses to compute the net income or net loss earned or incurred by the business during one accounting period.