Which of the following accounts are typically found on a single-step income statement?

• A. Revenues and expenses
• B. Assets and liabilities
• C. Cash and accounts receivable
• D. Owner's equity and dividends

Answer: (A)

Verified step by step guidance

1. Understand the purpose of a single-step income statement: It is a financial statement that reports the revenues and expenses of a business to calculate net income or loss for a specific period. It does not include accounts related to the balance sheet, such as assets, liabilities, or equity.
2. Identify the components of a single-step income statement: The statement typically includes two main sections—revenues and expenses. Revenues represent the income earned from business operations, while expenses represent the costs incurred to generate those revenues.
3. Eliminate irrelevant accounts: Assets, liabilities, cash, accounts receivable, owner's equity, and dividends are not part of the single-step income statement. These accounts are found on the balance sheet or statement of retained earnings.
4. Focus on the correct accounts: Revenues and expenses are the only accounts that are typically found on a single-step income statement. These are used to calculate the net income by subtracting total expenses from total revenues.
5. Conclude the reasoning: Since the single-step income statement is designed to provide a straightforward calculation of net income, only revenues and expenses are included. Other accounts listed in the options belong to different financial statements.