Which of the Following Statements About a Multistep Income Statement

question 31

Multiple Choice

Which of the following statements about a multistep income statement is correct?

• A)It groups all revenues together.
• B)It reports a different amount of net income than a single-step income statement.
• C)It includes expenses that would not appear on a single-step income statement.
• D)A key measure available on a multistep income statement is the amount of profit earned over the cost of goods sold.

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Definitions:

Profit Margin

A financial ratio calculated as net income divided by revenue, expressing the percentage of each dollar of revenue that remains as profit.

Net Income

The profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Net Sales

The revenue from goods or services sold by a company after deducting returns, allowances for damaged or missing goods, and discounts.

Depreciation

This refers to the accounting process of allocating the cost of tangible assets over their useful lives, representing how much of an asset's value has been used up over time.