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In a Single-Step Income Statement All Data Are Classified Under

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Essay

In a single-step income statement all data are classified under two categories: (1) Revenues or (2) Expenses. If the income statement is recast in a multiple-step format what additional information or intermediate components of income would be presented?


Definitions:

Adjusted Trial Balance

An inventory of every account along with its adjusted balance, utilized in the drafting of financial statements.

Adjusting Entries

Journal entries made at the end of an accounting period to update accounts before the financial statements are prepared.

Net Income

The residual earnings of a company after all costs including expenses and taxes are taken out from the total revenue.

Accrued Revenue

Revenue earned in one accounting period but not received until a later period, recognized in the financial statements when earned, not when received.

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