An Advantage of the Single-Step Statement of Income Over the Multiple-Step

question 35

Multiple Choice

An advantage of the single-step statement of income over the multiple-step form is

• A)the amount of information it provides.
• B)its comprehensiveness.
• C)its simplicity.
• D)its use in calculating ratios.

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Definitions:

Taxable Income

The amount of income subject to taxes, calculated by adjusting gross income by various deductions, exemptions, and adjustments specified by tax laws.

Book Income

Book income is a company's financial income as reported in the financial statements, adhering to the rules of accounting, before any tax adjustments.

Loss Carryback

An accounting technique that allows businesses to apply current year’s net operating losses to previous years’ profits to reduce tax liabilities.

Income Tax Benefit

A reduction in income tax payments, which can result from deductions, exemptions, or credits, often recognizing benefits from losses or deductions from previous years.