Multiple-Step Income Statements

question 172

Multiple Choice

Multiple-step income statements:

• A) Are only used in perpetual inventory systems.
• B) Are required by the FASB and IASB.
• C) Are required for the periodic inventory system.
• D) Contain more detail than a simple listing of revenues and expenses.
• E) List cost of goods sold as an operating expense.

---

Definitions:

Direct Labor Cost

The total cost of labor directly involved in the production of goods, including wages and benefits.

Break-Even Point

The level of sales at which profit is zero.

Units Sold

The quantity of product units sold by a company during a particular period.

Income Statement

An accounting statement that provides a summary of a company's revenues, expenses, and net income over a specific period.