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Single-step Income Statement quiz #1

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  • What is the primary purpose of a single-step income statement?
    The primary purpose of a single-step income statement is to show total revenues, total expenses, and calculate net income by subtracting expenses from revenues.
  • How are revenues and expenses presented in a single-step income statement?
    All revenues are listed together first, followed by all expenses, and then net income is calculated as revenues minus expenses.
  • Which accounts are considered revenues in a single-step income statement?
    Sales revenue and service revenue are considered revenues in a single-step income statement.
  • What is the total revenue if sales revenue is \$300,000 and service revenue is \$18,000?
    The total revenue is \$318,000.
  • Which item is not considered an expense on a single-step income statement?
    Dividends are not considered an expense on a single-step income statement.
  • List the expenses included in the example single-step income statement from the lesson.
    The expenses are wage expense (\$35,000), interest expense (\$6,000), cost of goods sold (\$180,000), income tax expense (\$12,000), and other general and administrative expenses (\$48,000).
  • What is the total amount of expenses in the example single-step income statement?
    The total expenses are \$281,000.
  • How is net income calculated in a single-step income statement?
    Net income is calculated by subtracting total expenses from total revenues.
  • What is the net income in the example if total revenues are \$318,000 and total expenses are \$281,000?
    The net income is \$37,000.
  • Why are dividends not included as an expense in the single-step income statement?
    Dividends are distributions to shareholders and not considered an operating expense.
  • What is the main advantage of using a single-step income statement?
    The main advantage is its simplicity, as it clearly shows total revenues, total expenses, and net income in a straightforward format.
  • Is cost of goods sold considered an expense in a single-step income statement?
    Yes, cost of goods sold is considered an expense.
  • What is the formula for net income in a single-step income statement?
    Net income = Total Revenues - Total Expenses.
  • If a company has sales revenue of \$200,000, service revenue of \$50,000, and total expenses of \$180,000, what is the net income?
    Net income is \$70,000.
  • In a single-step income statement, where are general and administrative expenses reported?
    General and administrative expenses are reported as part of total expenses.
  • What is the first section shown in a single-step income statement?
    The first section is total revenues.
  • What is the last line item in a single-step income statement?
    The last line item is net income.
  • Are interest expenses included in the single-step income statement?
    Yes, interest expenses are included as part of total expenses.
  • If income tax expense is \$12,000, how is it shown in the single-step income statement?
    Income tax expense is listed as one of the expenses in the total expenses section.
  • What distinguishes a single-step income statement from a multi-step income statement?
    A single-step income statement groups all revenues and all expenses together, while a multi-step income statement separates operating and non-operating items.